Glacier FarmMedia — With the speculative fund selling and relatively decent crop conditions on the Canadian Prairies, a broker said canola futures have little option but to continue falling back.
Over the last week, the most heavily traded new crop November canola contract has tumbled C$53.50 at C$681 per tonne on July 9.
“The turnaround is going to be as a result of the commodity funds slowing down their selling, and/or a change in the weather forecast that would reduce the amount of precipitation,” said Tony Tryhuk of RBC Dominion Securities in Winnipeg on what would be needed to stop canola’s sharp slide.
Read Also
Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
He added that dry conditions on the Canadian Prairies are concerning to the trade, especially those in Saskatchewan. However, rain is in the region’s forecast.
“Which is helping to create some weakness in the market,” he said.
Should conditions on the Prairies become drier instead, Tryhuk said prices will swing upward.
Market volatility has been another feature in recent canola trading, which Tryhuk said is typical for the growing season.
That volatility is further exacerbated by a lack of farmer selling.
“The magnitude of the moves tend to be accelerated a little bit as a result of the lack of participation,” Tryhuk said.
He noted that farmers generally don’t trade very much during the summer months.
