Canola Nov '21 (RSX21)
|Tick Size||CAD $0.10 per tonne (CAD $2.00 per contract)|
|Daily Limit||CAD $30.00 per tonne (CAD $600 per contract)|
|Contract Size||1 contract 20 tonnes (5 contracts 1 board lot)|
|Months||Jan, Mar, May, Jul, Nov (F, H, K, N, X)|
|Trading Hours||7:00p.m. - 1:20p.m. (Sun-Fri) (Settles 1:15p.m.) CST|
|Value of One Futures Unit||$20|
|Value of One Options Unit||$20|
|Last Trading Day||The business day prior to the 15th calendar day of the contract month|
Canola is a genetic variation of rapeseed that was developed by Canadian plant breeders specifically for its nutritional qualities and its low level of saturated fat. The term Canola is a contraction of "Canadian oil." The history of canola oil begins with the rapeseed plant, a member of the mustard family. The rape plant is grown both as feed for livestock and birdfeed. For 4,000 years, the oil from the rapeseed was used in China and India for cooking and as lamp oil. During World War II, rapeseed oil was used as a marine and industrial lubricant. After the war, the market for rapeseed oil plummeted. Rapeseed growers needed other uses for their crops, and that stimulated the research that led to the development of canola. In 1974, Canadian plant breeders from the University of Manitoba produced canola by genetically altering rapeseed. Each canola plant produces yellow flowers, which then produce pods. The tiny round seeds within each pod are crushed to produce canola oil. Each canola seed contains approximately 40% oil. Canola oil is the world's third-largest source of vegetable oil, accounting for 13% of world vegetable oils, following soybean oil at 32%, and palm oil at 28%. The rest of the seed is processed into canola meal, which is used as high-protein livestock feed.
The climate in Canada is especially suitable for canola plant growth. Today, over 13 million acres of Canadian soil are dedicated to canola production. Canola oil is Canada's leading vegetable oil. Due to strong demand from the U.S. for canola oil, approximately 70% of Canada's canola oil is exported to the U.S. Canola oil is used as a salad oil, cooking oil, and for margarine as well as in the manufacture of inks, biodegradable greases, pharmaceuticals, fuel, soap, and cosmetics.
Canola futures and options are traded on the ICE U.S. Exchange. The futures contract calls for the delivery of 20 metric tons of canola and 5 contracts are together called a "1 board lot." The futures contract is priced in Canadian dollars per metric ton.
Prices - ICE U.S. canola prices on the nearest-futures chart (Barchart.com symbol code RS) in 2019 hit a 5-year low but then moved higher to close the year down -1.1% yr/yr at CD$467.508 per metric ton.
The average monthly wholesale price of canola oil in the Midwest in 2019 fell -5.4% yr/yr to 35.88 cents per pound. The average monthly wholesale price of canola meal (delivery Pacific Northwest) in the 2019/20 crop year fell -6.4% to $267.90 per short ton.
Supply - World canola production in the 2019/20 marketing year is forecasted to fall -6.4% yr/yr to 67.724 million metric tons, down from the 2017/2018 record high. The world's largest canola producers are expected to be Canada with 38.1% of world production in 2019/20, European Union with 25.1%, China with 19.3%, and India with 11.4%. U.S. production of canola in 2019/20 is expected to fall -5.5% yr/yr to 1.553 million metric tons. Regarding canola products, world production of canola oil in 2019/20 is expected to fall by -2.0% to 26.979 million metric tons. U.S. production of canola oil in 2019/20 is expected to rise by +4.4% to 728,000 metric tons, remaining below the 2016/17 record high of 798,000. World production of canola meal in 2019/20 is expected to fall -2.2% to 38.019 million metric tons.
Demand - World crush demand for canola in 2019/20 is expected to fall -2.4% yr/yr to 65.806 million metric tons. World consumption of canola meal in 2019/20 is expected to fall -2.8% yr/yr to 37.956 million metric tons. World consumption of canola oil in 2019/20 is expected to fall -1.6% to 27.752 million metric tons.
Trade - World canola exports in 2019/20 are expected to rise by +2.6% to 14.971 million metric tons, but still below the 2017/18 record high. World canola oil exports are expected to rise by +2.1% to 5.062 million metric tons, a new record high, and world canola meal exports to rise +2.6% yr/yr to 6.932 million metric tons, a new record high. World canola imports in 2019/20 are expected to rise by +2.2% to 14.606 million metric tons, world canola oil imports are expected to rise +2.9% to 5.089 million metric tons, and world canola meal imports are expected to rise +1.5% to 6.859 million metric tons. Regarding U.S. canola trade, U.S. canola imports in 2019/20 are expected to fall -26.6% to 409,000 metric tons, and U.S. exports are expected to fall -0.6% to 180,000 metric tons.
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