Glacier FarmMedia — A Winnipeg-based commodity futures advisor said the November canola contract on the Intercontinental Exchange is not far away from reaching lows unseen since last spring.
The November canola contract lost C$10.90 per tonne to close at C$607.20 on Oct. 1, but the price fell to C$596.70 during the day’s trading for its lowest value since March.
David Derwin of Ventum Financial Corp. said harvest pressure and a sharp drop in exports compared to last year have brought canola futures down over the past few weeks. He added that nearby canola has fallen to C$600/tonne four times before over the past two years and now is usually when the oilseed explores new depths.
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“This time of year, coming into the end of September and beginning of October is historically the seasonal lows. That’s the case for soybeans and corn, as well,” Derwin said. “A lot of people are telling me they’re having really nice yields … (Prices) going down to that level is maybe not out of line with the trends that we’ve seen in canola the past couple of years.”
November soybeans fell below US$10/bu. for the first time since August on Oct. 1 before closing higher. Meanwhile, December soyoil lost nearly six cents per pound since late August.
“Percentage wise, that’s a big move and a drag on canola prices, as well,” Derwin said.
He added that canola harvest progress on the Prairies was “mixed”, showing normal to excellent yields. The Manitoba canola harvest was 76 per cent complete as of Oct. 1 with yields ranging from 30 to 60 bu./ac. Alberta’s canola harvest was 55.9 per cent complete as of Sept. 23, while Saskatchewan’s was 42 per cent finished as of Sept. 22.
As the Prairie canola harvest nears its end, Derwin thinks it’s possible canola could sink to its March lows at around C$580/tonne.
“That’s only C$20 or C$25 from here, so that could happen,” he said. “C$20 on canola nowadays is not that big of a fluctuation over the course of a couple of weeks.”
