Canola is looking at what could be yet another good year, following a few external factors.
This included the same issue that had affected most of Canadian agriculture, the war in Ukraine.
Neil Townsend, Senior Market Analyst at FarmLink Marketing Solutions, details some of the good points before a reverse began.
"We've had a pretty good year, in terms of canola. We had high prices for the bulk of the year, a good opportunity. I think for a lot of Canadian farmers it kinda seems like out of nowhere the market starts to reverse. That was a combination of great weakness in the EU market prompted partly by an inflow of imports from Ukraine."
As well, another competitor had a great record year which impacted the canola market.
"The other thing that did happen, it's gonna have some impact, is a record large Australian crop of 8.3 million tonnes. That's like a record by 25%, let's call it that. Australia doesn't really have a domestic usage of canola," said Townsend, "They export it all, so that's been kind of outflowing."
That's had an effect on Canadian canola even as we don't have a hand in their market.
"The interesting thing is Canada hadn't been exporting to the European Union. So why our prices kind of went in reverse," said Townsend, "Just because they're getting oversupplied by these other things, it's all a part of a larger matrix."
While canola might not reach the heights it was at, Townsend expects it to still do well.
"We don't expect canola to rebound back to the heights unless there's a real weather problem. But I also don't agree with people who are saying that Canadian ending stocks are going to be burdensome or anything like that. From what I see, the crush seems to be steady as you go, like a solid number, and the exports seem to be also well on their way to getting to the 8.3 or 8.4 million ton export forecast that we have."