Grain Market Update - Canola (May 2022)

The following graph shows the movement in ICE November 2022 Canola Futures price expressed in A$ and the domestic canola price delivered Port Kembla. Also included is the 10 year average ICE November Futures basis for the domestic price at Port Kembla, plus the corresponding basis for the current year.

At present the ICE November Futures price is A$1,187/tonne equivalent and the domestic price is $1,066/tonne delivered port. The resulting basis of -A$120/tonne equivalent is significantly more negative than the basis at the same time last year, which was -$3/tonne.

The futures price is currently $644/t higher than the 10 year average for this time of year, due to the predicted reduction in supply of oilseeds resulting from poor weather conditions in places such as western North America, in addition to COVID-19 driven shipping and logistical issues.

The domestic canola price at present is in excess of a Decile 9 price, calculated on prices from 2011 to date. This is similar to this time last year.

A PKE price of $1,066/tonne represents $1,028/tonne local depot with freight to port of $38/tonne. This will be well above clients’ Break Even Price at average yields.