Canola Looks Good for 2010/2011
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Market analysts predict that canola will remain a strong option for producers in western Canada going in to 2010/2011. Producers of canola will have to be consistent about monitoring prices and making sure that they are taking advantage of the best pricing opportunities, due to the expectation of range-bound prices, but due to the growing demand for canola in several markets, including the biofuel market, the crop looks set for steady demand in the coming year.
Although spring seeding is still a long ways away, and the harvest only recently ended, many producers are turning their thoughts to the next year’s crops and making plans for putting what they hope will be high-demand crops in the ground. Canadian farmers have a variety of crops to choose from, but for many growers, canola still looks to be the most promising bet.
Canadian canola producers had a bit of a rough year this year, with import restrictions in China leading to a complete slow-down in the Canadian canola market, but compared to recent downtrends in other cereal grains, canola is still coming out on top. Furthermore, predictions that fertilizer prices will remain moderate in 2010/2011, after the market took a dramatic slump this year, also hold promise for canola growers as the crop uses a lot of nitrogen. This means that cost of fertilizing this popular crop will remain reasonable, making it an even more feasible option than in recent years.
From a pricing perspective, there have been opportunities for pricing the 2010/2011 crop, although most producers haven’t done anything about it yet. After two years of slight downwards motion, market experts predict that canola is entering a “sideways trading range”, with a range that could go as wide as $100. This wide range would actually present some good opportunities for canola growers. However, it means that vigilance and a lot of monitoring of the market will be essential for crop producers who want to make the most of their canola.
Factors like weather and the production of and market for canola worldwide will play a significant part in determining what canola prices look like, but early predictions put the prices at potentially $8.90 to $9.30 per bushel.
