MarketsFarm — Over the last week or so canola prices have been largely supported by two factors, according to Errol Anderson of Pro Market Communications in Calgary.
“To some degree it’s still crop uncertainty and growers aren’t selling.”
Cash bids have varied widely, he said, while spot premiums have shot up a bit.
“That indicates to farmers there’s potential life,” Anderson said.
However, Prairie farmers have continued to sit on a great deal of now-old-crop canola with the harvest of the new crop just getting underway.
“How long they can dig in is another question. Certainly cash flow for the fall will be an issue once the fertilizer bills come due,” he said.
That will likely see farmers moving their canola no later than October, he added.
The recent spate of cold, wet weather helped as well, Anderson noted. Despite a few days of above-normal temperatures on most of the Prairies aiding the harvest, it was slowed by precipitation across the region with more in the forecast.
Also weather-wise, the slow development of this year’s crop delayed the harvest and has left canola and other crops susceptible to frost damage when overnight temperatures get colder.
There also was support from the soy complex on the Chicago Board of Trade, according to Anderson. Prices for soybeans rose on optimism toward trade talks between the U.S. and China. With the global economy threatened by a recession, the chances for a deal have become more likely.
— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.