Current canola premiums spell opportunity that shouldn't be missed

In the western Canadian market, there’s currently been a lot of focus on canola, and StatsCan confirmed as much in their latest satellite-based report.

Brennan Turner, CEO of FarmLead, says that when it comes to this StatsCan report, he would call himself a believer. Although there have been some yield numbers that Turner’s heard that vary a bit from what the StatsCan numbers are saying, he admits it’s a pretty safe forecast.

“At the end of the day, Statistics Canada tends to underestimate their crops in their early reports regardless of their survey estimates or database estimates. Arguably, I’d argue that their numbers were pretty good,” explains Turner. “On the flip side, provincial yield numbers from Alberta and Saskatchewan tend to underestimate the crop. So I think we are probably somewhere in the middle, and I think some of the premiums that you are seeing on the board today shouldn’t be ignored.”

Soybeans have seen a continuous rise, and canola has been following a similar pattern. But is that all it’s doing? Following? Turner thinks they definitely give the following sentiment, as soybeans do lead world oilseed pricing.

“We’re talking about strong exports continuing into the 2020/2021 cropping year, and there are some harvest threats as well. You’ve got frost that happened last week, and even this week in a few areas. So there’s a lot of things that are weighing in on the market, and that’s why we’ve seen the premiums pull up here,” Turner explains. “For most parts, $11/bu has been seen on every single bid sheet across western Canada at some point in the last ten days or so. We haven’t seen those values in so many years.”

Although this is a good news story for canola growers, Turner does have concerns when it comes to these unseasonal premiums.

“The premiums that we usually see, the ones that are rallying in the fall and winter months, might not be as robust as years past. With that in mind, i’m just cognizant of making sales and taking a profit when I can at these kinds of humps.”

With November futures at over $520, and some carry in the market, producers can be feeling like things may be heading back to a bit of normalcy — despite this being abnormal timing. As Turner notes, these are the kinds of opportunities you probably shouldn’t pass up.

“I can’t guarantee that these prices are going to stay at these levels. There are some arguments out there that we’ve kind of hit this new price equilibrium in terms of demand versus supply, and that we’ve kind of figured this out, so the higher prices are here to stay. But the downside risk is very real,” he notes.

Check out the full conversation with Brennan Turner, and RealAgriculture’s Shaun Haney, below:

One thought on “Current canola premiums spell opportunity that shouldn’t be missed

  1. Canola yields are 25% less in Manitoba that we were expecting. The crop looked great until we got in with the combines. I would not count on aggressive sales from this area of the country in the near future.

Leave a Reply

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Privacy Preference Center

Necessary

Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.

gdpr, __cfduid, PHPSESSID, wordpress_test_cookie, woocommerce_items_in_cart, woocommerce_cart_hash, wp_woocommerce_session, wordpress_logged_in, wordpress_sec, wp-settings, wp-settings-time, __cf_mob_redir, wordpress_cache, realag
__cfduid

Marketing

Measuring interactions with the ads on the domain.

__gads,fsk_ut_2317
scmtid,v,a,JSESSIONID
IDE

Statistics

These are used to track user interaction and detect potential problems. These help us improve our services by providing analytical data on how users use this site.

_ga,_gid,_gat,_cb,_chartbeat2,_chartbeat4
_ga,_gat
_ga,_gid
metrics_token

Preferences

Preference cookies enable the website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.

chartdefaults, comment_author, comment_author_email, comment_author_url
JSESSIONID, _os_session,anonymous_votes,csrf-param,csrf-token,user,user-id,user-platform,intercom-session,intercom-lou,intercom-session
personalization_id, tfw_exp