Grain Market Update - Canola (April 2021)

The following graph shows the movement in ICE November 2021 Canola Futures price expressed in A$ and the domestic canola price delivered Port Kembla. Also included is the 10 year average ICE November Futures price expressed in A$ and the 10 year average domestic price at Port Kembla.

At present the ICE November Futures price is A$615/tonne equivalent and the domestic price is $618/tonne delivered port. The resulting basis of A$3/tonne equivalent is significantly less than the basis at the same time last year, which was $100/tonne.

The futures price is currently $96/t higher than the 10 year average for this time of year. This has been caused in part by significant yield and quality downgrades for South American Soybeans due to both excessive rainfall and drought in different parts of the continent. The current high prices will provide clients the opportunity to minimise price risk through the sale of SWAPS or forward selling a proportion of their 2021 crop. 

The domestic canola price at present is a Decile 8 price, calculated on prices from 2009 to date. This is lower than the same time last year when the price was a Decile 9 price, but in absolute terms a very good price.

A PKE price of $615/tonne represents $577/tonne local depot with freight to port of $38/tonne. This is likely to be well above clients’ Break Even Price at average yields.