By Glen Hallick, MarketsFarm
WINNIPEG, Aug. 18 (MarketsFarm) – Intercontinental Exchange (ICE) canola futures were lower at midday Wednesday, but still remains very expensive according to a trader.
“Canola is doing exactly the job it needs to do. It is in the stratosphere and it’s going to have to stay there,” the trader emphasized.
That price rationing, he added, will need to remain in place for the time being as the supply situation with canola continues to be uncertain.
Very tight ending stocks of about 750,000 tonnes for 2021/22 were based on production of approximately 20 million tonnes. With the Prairie drought many estimates adjusted the crop at 15 million to 17 million tonnes. The trader said 13 million to 14 million tonnes has become very possible.
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“If [growers] get 20 bushels per acre, they’ll be in dreamland,” he said, noting that some parts of the Prairies will see much better yields, while other parts are likely to be worse.
The first solid confirmation of how bad this year’s crop won’t come until the end of the month when Statistics Canada issues its next report on principal field crops.
That said, the Manitoba crop report rated the province’s canola at 35 per cent good to excellent, which was unchanged from last week. The harvesting of all crops in Manitoba was estimated at 21 per cent complete.
The current situation with canola was highlighted in the latest ICE canola crush margins, which pegged the November-October contract at minus $1.05 per tonne. The November December contract was only 42 cents per tonne.
Declines in the Chicago soy complex, European rapeseed and Malaysian palm oil weighed on canola values.
The Canadian dollar was slightly lower, with the loonie at 79.13 U.S. cents compared to Tuesday’s close of 79.22.
Approximately 8,850 canola contracts were traded as of 10:47 CDT.
Prices in Canadian dollars per metric tonne at 10:47 CDT:
Price Change
Canola Nov 912.70 dn 5.60
Jan 897.00 dn 4.60
Mar 877.10 dn 5.10
May 855.10 dn 5.10
