MarketsFarm — ICE Futures canola contracts climbed sharply higher in the front months during the week ended Wednesday, hitting their highest levels since 2008.

The March contract settled Wednesday at $717.80 per tonne, marking the first close above the $700 per tonne level since March 2008.

“Everybody is long, and everybody won’t make a profit in the end,” one canola trader said.

“The whole thing is predicated on the tight visible stocks,” the trader added, noting “if we keep exporting and processing the way we are, we’re going to run out.”

Canada has exported 5.8 million tonnes of canola through the first 24 weeks of the 2020-21 crop year, according to Canadian Grain Commission data. That compares with 4.2 million tonnes at the same point the previous year.

The latest supply/demand estimates from Agriculture and Agri-Food Canada peg canola ending stocks for the current marketing year at 1.2 million tonnes, but analysts expect that could dip below a million tonnes if the export pace holds up.

The trader thought canola was looking overpriced, but added that picking a top in the market was difficult, as values could still move higher before the inevitable crash.

New-crop prices have lagged the front months to the upside, but the trader expected the tight old-crop situation would eventually pull the deferred months up as well.

“Everybody will be desperate to get the canola… and off the combine you’ll see some great prices if the market holds,” the trader said.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.