The USDA, in its latest Oil Crops Outlook, raised the canola crush forecast for the 2022-23 October to September time period to a record high, pushing production of oil and meal higher in 2022-23. Along with higher crush, the 2022-23 canola oil imports were revised up and finalized at a record 6.3 billion pounds. It said this trend in canola oil imports is largely driven by a strong demand for canola oil after the Environmental Protection Agency (EPA) approved the canola oil pathway for renewable diesel in December 2022.
For 2022-23, canola oil used for biofuel is estimated at 3 billion pounds. Canola oil for food use is estimated to reach a record high in 2022-23 at 5 billion pounds, up 0.2 billion pounds from last month. Ending stocks in 2022-23 will be 0.2 billion pounds. The 2023-24 canola oil balance sheet shows canola oil used for biofuel growing to 3.4 billion pounds and imports rising to 6.6 billion pounds.
The USDA also reported that from October 2022 to August 2023, soybean oil use in biofuels totaled 11.3 billion pounds, 19 percent higher than same period the prior year. This caused the agency to increase its estimate for soybean oil use in biofuels production by 300 million pounds to 12.4 billion pounds in the coming marketing year.
Oilseed markets have recovered quite a bit of ground recently as Brazil planting weather has caused problems for the upcoming soybean crop. Canola reached a one-month high until Nov. 22 when it closed lower, reportedly failing to close above key technical levels. Canola prices have lagged soybean oil prices, which rose 5.6 percent since the beginning of the month.
The January ICE canola futures finished the session on Nov. 22 at $709 per metric ton (MT), down $11.50 on the day but up another $10 per MT in the last two weeks. The March ICE canola futures contract reached $714 per MT, down $11 on the day but up another $7 per MT in the last two weeks. While canola futures markets have strengthened, canola basis levels have weakened as crushers in North America have moved cash bids to be close to export bids.
More canola production news will come out in the next two weeks as Canada issues its final crop production statistics for the year and Australia provides an update on its canola production.
Local cash prices on Nov. 22 at nearby crush plants ranged from $23.17 to $24.50 for November and December deliveries, up $.50 per hundredweight in the last two weeks. January canola prices ranged from $23.17 to $24.30, up $.65 per hundredweight in the last two weeks.
The Northern Canola Growers Association (NCGA) had a very successful annual meeting in conjunction with the Durum Growers Association in Minot, N.D., on Nov. 1-2. Over 150 growers attended the two-day meeting, featuring geopolitical speakers, marketers, and canola researchers.
Two new producer board members were voted onto the board of the NCGA during the annual meeting. Devin Wert of New England and Shawn Murphy of Carpio were voted in as producer directors on the NCGA board. They join other producer directors Dan Marquardt of Bottineau, Mike Brekhus of Kenmare, Troy Romfo of Calvin, Tim Mickelson of Rolla, Zach Jacobson of Langdon and Matt Mongeon of Rolette.