![]() In Figure 2 & 3, the basis between ICE and Matif is shown. The drought in Australia has drastically impacted canola production, therefore we would expect that the local premium (basis) against overseas futures would rise dramatically. However, in recent weeks, the market has lost much of its momentum and is sitting below the average from Aug-Nov. The ICE contract also followed the general market. The Matif contract rose through July-September as drought conditions impacted upon the German and French crops. In Figure 1, the Matif and ICE spot contract is displayed in A$/mt. The Matif contract is non-GM, whilst the ICE contract is GM. If we are ignoring local derivatives, the main contracts are Canadian Canola futures (ICE) and French Rapeseed (Matif). Farmers who are hedging using financial price risk management tools will then have to look overseas for a market. However, it has no trading activity, therefore it is ineffectual. There is an Australian canola futures contract on ASX. This week we will take a look at the canola futures market. Two weeks ago, we wrote about canola pricing catching up with the drought conditions in the article “ Canola: Finally catching up”. With a massive hay program and dry finish, what will happen to yield and oil content? In this analysis, we take a look at canola basis versus Canada and France. Posted in Lamb, Sheep Tagged Analysis, Articles, Business, Commodity, Opportunities, Sheep Canola & Rape futures.Ĭanola is starting to be harvested but a cloud hangs over the industry. The relatively strong prices in the face of heavy supply are encouraging, however, at least for well-finished lambs. The Melbourne Cup usually sees lower yardings next Tuesday, so we might not get a real indication until the following week. The test will be whether supply continues to flow, or if it pulls back with lower prices. ![]() The high prices of the last couple of weeks, along with dry weather, encouraged growers to offload lambs this week. Still well behind the east, but on the way up. ![]() While in the west, lamb prices rallied, gaining 9¢ to 575¢/kg cwt. Processors and restockers were happy to buy lambs at the lower levels, even if they weren’t to be killed this week.Īll lamb prices fell this week, but mutton ‘only’ lost 35¢ to sit at 431¢ on the east coast and 400¢ in the west. The Eastern States Trade Lamb Indicator (ESTLI) fell 77¢ but only back to the levels seen three weeks ago. When supply overwhelms demand, prices fall. Normally we don’t see Victorian lamb yardings over 100,000 head for another month and so processors definitely didn’t have the space to kill them. With plenty of lambs and sheep seemingly booked in over the hooks, prices tanked sharply. ![]() The lift in supply was felt across all yards, with Naracoorte in South East South Australia also seeing a big rise. Metaphorically, not literally.Īfter Matt’s article last week, and earlier this week, looking at Victorian lamb yardings, or lack thereof, this week the lambs appeared (Figure 1). It’s a weak analogy, but with Victorian lamb producers facing encroaching dry conditions, they have held, and held, and held, until this week they raised their spears, but were themselves impaled. Mel said ‘Hold, hold, hold, now!” and the Scottish rebel impaled the English horses on spears and subsequently won the battle. Those familiar with the movie ‘Braveheart’ will recall the scene where Mel Gibson and co are facing a cavalry charge from the English Army.
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