AUS vs CAN RS Oil Content: Any comments as to why?

[crusher]

So when is the arbitrage going to take place? If I was a buyer I'd be buying from Canada.

[Landdownunder]

Interesting my guesstimate australia produces 5.5 million tonne canola?? Domestic use maybe 500,000 tonne so 5 million exported in SE Asia/asia and EU markets i think.

Same markets you do. Of course we have blue water adavantage into some markets but so do you.

So wow theres some discrepancies in pricing as larry points out.

[farming101]

Nearly all the canola oil exported goes to the US and the majority of that is now refined not crude. And a lot of that is specialty oil. So there's a premium attached to that.
Stat Can September Canola seed exports price reported at 670.48/t average for total world exports. Guess that's why business is brisk

[LWeber]

trick then is to sell to a flat cash buyer no oil bonus but higher base price. but your correct premiums and discounts apply.

In Ukraine ****seed prices grow under the influence of active demand - Last week prices in the domestic market of ****seed in Ukraine continued to grow against the background of continued demand from a number of export-oriented companies and higher prices in the external market of this crop. At the same time, the pace of trade on the Ukrainian market continued to gradually slow down due to the reduction of stocks. On the export direction of ****seed demand prices increased to 24000-24600 UAH/t CPT-port (CAD$803.50 to $823.13/MT or CAD$18.22 to $18.66 per bushel) and continue to increase due to the growth of ****seed quotations in Europe. (APK) AUS AWB closed CAD$17.48/bu with no oil bonus. ADM Lloyd closed at $13.70/bu yesterday. Best send this to all your non-subscriber friends so they quit selling for $3.78 and $4.96/bu less than AUS and UKR. In SK, using the SK AG estimated canola yield of 33 bpa, that is $124.74 an acre better using AUS prices and $163.68/acre using UKR prices. Good thing we don’t have an Export Sales Reporting program to put everyone on the same information level.

[Landdownunder]

Mallee(LOL)...
In Canada, in the red milling wheat market, it seems the discounts below the base protein content are greater than the premiums above the base.

I bet they would do the same thing for oil content above and below the base oil content in canola.

In years where someone grows extremely high protein wheat we may not get compensated above a certain protien content.

trick then is to sell to a flat cash buyer no oil bonus but higher base price. but your correct premiums and discounts apply.

[LWeber]

The years when oil is say 48% and base price is $900 big bonuses

Thanks for weighing in Malee...

[LWeber]

I wonder what the oil content is between varieties. I know some people would balk at getting paid by oil % but doesn't the majority of the value come from the oil and not the meal, shouldn't we be striving to get that oil content as high as possible. But I guess if the crushers aren't complaining and are happy about it, maybe I should too. Just seems maybe we should be doing better.

UK oilseed **** (OSR) prices may have fallen from their approximate £600/t highs, but maximizing oil content to optimize bonuses paid on top of yield is as important as ever.

That is the message from ProCam agronomist, Daniel Hatchett, who says if an oil bonus pays 1.5% of the crop’s purchase price for every 1% of oil content above 40%, there is a lot to play for.

“The key is to understand what influences oil production so agronomy can be geared accordingly,” says Daniel. “Oil content is affected by plant density, the number of pods per plant and the number of seeds per pod. For maximum oil content, photosynthesis must be maximised. Maintaining the correct amount of green area in the crop is therefore key.”

Nitrogen (N) is a prime driver of photosynthetic activity and yield, says Daniel, however, applying excessive N to push yield can adversely affect oil content, while severe sulphur (S) deficiencies can also impact on both seed and oil yield.

“For a tonne of seed yield, 15kg/ha of S is suggested to be needed. If S is deficient, as well as having yield implications, the chlorophyll content of seeds is raised and they turn green. This reduces quality for crushers and potentially oil content,” he explains.

“As well as macronutrients, micronutrients must also be in balance. Manganese deficiency alone can drastically decrease the crop’s ability to photosynthesise, even without visible symptoms. But an important period for influencing crop green area is around flowering,” he says.

“We know the disease sclerotinia can have a significant impact on yield, and controlling it with a robust fungicide at the correct flowering stage is critical. By utilising an SDHI and/or strobilurin for this, there’s an additional greening benefit which is extremely useful in building yield – even in the absence of disease.”

In addition, Daniel says maximising light penetration throughout the crop is hugely important for photosynthetic activity, so checking the crop’s green area index and selecting a fungicide with PGR activity is critical where canopies are overly thick.

“The canopy can be optimised further by applying a biostimulant treatment containing nutrients and pidolic acid at yellow bud stage. This is because pidolic acid enables the crop to use N more effectively, helping to promote green leaf retention and chlorophyll content, both of which are crucial during pod-fill. Indeed, late N in OSR has been found to push yields and oil content. So a pidolic acid-containing treatment also fits well ahead of a later foliar N spray applied at mid-flowering.”

At the end of the season, Daniel says it is crucial to get harvest management right. “Seed filling in OSR occurs over roughly six weeks, with most oil being laid down during the second half of this. Desiccating or swathing too early risks losing up to 2% a day in yield and compromising oil content. Alternatively, harvesting too late risks seed losses due to pod shatter. So it’s about finding a balance.

“Applying a well-timed pod sealant against shatter and choosing the optimum time to harvest can substantially raise oil yield. It may be tempting to tank-mix a pod sealant and desiccant, however their optimum timings often don’t coincide. Last season’s high oil contents could potentially be attributed to pod sealants being applied separately from desiccation due to the crop’s high value. This year should be no different. Doing everything to preserve yield and promote oil content is likely to give the best financial reward.”

AUSTRALIA BONUS PROGRAM

Eastern Australian farmers are paid for their canola crop on the basis of a bonification scheme, providing a bonus of 1.5% for every percentage point above 40% oil, on an as received moisture content. For a crop with 46% oil, the farmer would be paid a 9% bonus. This also works in reverse with a similar penalty rate for every 1% below 40% oil. In Western Australia, the base oil content for payment is 42% and the penalties for low oil content are greater than in eastern states.

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In the end you have to comfortable with the hand you have been dealt and ok taking a price that no one gives a shit how much $ farmers make.

Friday's AWB best bid in the Malee, Victoria, AUS was CAD$813.91/MT - for a basis of PLUS $168.01 for 44% oil content.

Friday's cash bid at Lloyd crusher was CAD$604.90/MT- with a basis of MINUS $41.00/MT.

It was only a CAD$209.01/MT difference...nothing to see here.

Why worry about 1-2.5% oil content in the meal?
The third highest canola oil price sale reported to STATSCAN in August was $1679.10/MT and that is nearly $42.00/MT at 2.5% that went in the meal. That $42/MT equates to $32.00/acre even with a 32-33 bu yield.

It drives me insane that after watching farmers struggle with trying to break even from 1981 to 2008, and after the last 15 years of decent returns, it has become acceptable to stop asking questions and take what you get... The Palliser Wheat Growers alumni would puke.

[Jordy2323]

I wonder what the oil content is between varieties. I know some people would balk at getting paid by oil % but doesn't the majority of the value come from the oil and not the meal, shouldn't we be striving to get that oil content as high as possible. But I guess if the crushers aren't complaining and are happy about it, maybe I should too. Just seems maybe we should be doing better.

The downside would be, that if there was a farming practice, or a variety that would increase oil %, the farmer might briefly get a premium.
But that would then quickly become the new standard... the premium would dissappear, and all you would have left are discounts for anything below the new standard.

[Wheatking]

I wonder what the oil content is between varieties. I know some people would balk at getting paid by oil % but doesn't the majority of the value come from the oil and not the meal, shouldn't we be striving to get that oil content as high as possible. But I guess if the crushers aren't complaining and are happy about it, maybe I should too. Just seems maybe we should be doing better.

[LWeber]

most sales to my recollection are for around 41% oil.

36 years of canadian canola crush yield and oil content

And there is this gem: The oil content of Canadian canola meal tends to be relatively high at 3.5% compared with 1–2% oil content in canola meals produced in most other countries. (SCIENCE DIRECT - 2016)
([url]https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/canola-meal[/url])?