Glacier Farm Media | MarketsFarm – As the turnaround in canola continued, an analyst said there are three factors underpinning the swing upward. David Derwin, commodities futures advisor for Ventum Financial in Winnipeg, pointed to the gains made by soyoil futures on the Chicago Board of Trade, the weakening of the Canadian dollar, and the reduction in the canola harvest made by Statistics Canada.
Over the last two weeks, Chicago soyoil has added 1.34 cents to close Dec. 11 at 42.26 United States cents per pound. During the same period, canola advanced C$57.50 at C$622.10 per tonne. Then the loonie gave up about 6/10ths of a cent at 70.65 U.S. cents.
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On Dec.5, StatCan issued its principal field crop report, with canola production for 2024/25 cut to 17.84 million tonnes from the 18.98 million estimated in September.
“There’s an inherent move upward in canola because of the StatCan report, but a lot of it can be explained by a weaker currency,” Derwin said, noting that movement in Chicago soyoil almost always pull along ICE canola.
He suspected canola could hold within a range of C$600 to C$625/tonne for the balance of December.
“I wouldn’t be surprised we are coming into a little bit of resistance,” Derwin speculated.
Another supportive factor Derwin pointed to was the speculative funds, as they could add to their short positions.
Complimenting StatCan’s cut to canola production was the Dec. 10 U.S. Department of Agriculture world oilseed report. The USDA reduced its call on Canada’s 2024/25 canola crop to 18.80 million tonnes from the 20 million the department held on to for the last few months.
