The market has been positive for canola with producers seeing some record prices in 2021.
The industry has seen tight canola supplies with the latest number from Stats Can putting crop estimates at about 12 million tonnes.
Chuck Penner, President of Leftfield Commodity Research says we saw an increase in demand from our domestic crushers, but what it really hurt was our exports.
"So strong demand from various countries the US, from Europe, from China. Good demand from there, but we just didn't have the canola to supply them. So what that did is it brought us up to some record price levels. We've got canola futures up over $1,000 a ton."
However, he says, in the last few weeks the market seems to have been leveling off
"There are all kinds of allied markets. So things like soy oil, palm oil, those kind of things. There we're seeing more softness in the market, so even though Canola supplies are far tighter than any of these other crops. It remains to be seen whether it can continue to rise, where these other markets are starting to turn a little bit lower."
Penner notes that another highlight for Canola in 2021 was the announcement of three new processing plants.
"Some of them are being built on the premise that we will have an expanded biofuel mandate in Canada that will require more canola oil. So that's all positive. The positive things are that the domestic processing tends to be much more stable. It's not subject to geopolitical intrigues, disputes and so on."
Viterra, Cargill, and Ceres Global Ag Corp all announced plans for new canola processing plants in Saskatchewan that will add over four and a half million tonnes of crush capacity per year.