Australian canola prices remain at decile 10 levels into the end of May.
The 2022/23 canola bids were $1150 a tonne in Outer Harbour and Port Lincoln zones on Friday last week.
Prices have been supported by planting delays in Canada, yield concerns in Europe and the ongoing Russia-Ukraine war.
Global prices for soybean and canola seed have been strongly correlated to global crude oil prices.
Good crush margins in producing biofuel from oilseeds remain strong and processors continue to purchase old and new crop soybeans to keep crushing plants operating efficiently, despite tight stock levels.
Crude oil prices have been rising through the calendar year due to increased global economic activity rebounding from the COVID-19 slowdown, as well as sanctions on Russian oil, lifting the price of crude oil sourced from other origins.
In Canada, reports from Saskatchewan have the spring crop planting progress at 52 per cent as of May 23, up from 33pc from the week prior, but behind the five-year average of 78pc completed.
Wet and cool weather through eastern parts of both the Canadian and US summer cropping areas continues to hamper seeding as farmers have limited access to fields.
This is not just impacting canola planting but also soybeans, corn, and spring wheat in North America.
Global oilseed stocks remain very tight; further planting delays will limit the prospects of a rebound in supply to help loosen the balance sheet.
High soybean prices have been unable to ration demand, demonstrated by continued high domestic crush in the Americas and steady imports from China.
Canola, rapeseed and soybean futures markets are showing an inverted market, as opposed to a normal carry market, with near-term contract prices higher than later months, reflecting the strong near-term demand for oilseeds and bullish sentiment.
Winnipeg canola remains near historical highs with the July 22 contract showing an Australian $120/t premium over the November 22 contract.
New supply of oilseeds will be led by the current soybean harvest in Brazil, followed by rapeseed across parts of Europe in June/July, then rapeseed in Ukraine and soybeans in the US through August/September, canola in Canada in September/October with Australian supplies harvested in November/December.
Prices are expected to be volatile over the coming months as weather forecasts and concerns regarding any changes to production could result in significant price volatility.
A proposal put forward to establish a protected shipping corridor for grain exports from Ukraine ports weighed on prices early last week, but with no agreement being reached, grain markets firmed into the weekend.
Exports of Ukraine grain are being executed via rail and road; however, the volume and cost of this move is highly unlikely to return Ukraine grain exports to normal capacity.
With harvest approaching in Ukraine, a clogged grain export pathway will have flowback effects on the ability to store newly harvested grain and therefore diminish quality, further fueling concerns around tight global oilseed stocks and exportable supplies.
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