Glacier FarmMedia — Weather conditions across the Canadian Prairies will likely be a major driver of the canola futures market in the weeks ahead, as attention shifts from the tight old crop supply situation to the prospects for the new crop.
“At this time of year, it’s often about weather,” said David Derwin, commodities investment advisor with Ventum Financial in Winnipeg.
Speaking with farmers across the Prairies, Derwin had heard of a wide range of conditions — from too dry to too wet and everything in between.
Read Also
China rapeseed meal futures see largest one-day gain in almost three months after Xi–Carney talks
China’s most active Zhengzhou rapeseed (canola) meal futures posted their largest daily gain in nearly three months on Monday, after Canadian Prime Minister Mark Carney and Chinese President Xi Jinping met in South Korea last week without securing a breakthrough on tariffs.
While canola recently backed away from nearby highs and has generally traded sideways over the past month, Derwin said that with Canada Day and the Fourth of July holiday in the United States only a month away “we often see fireworks in the markets as well.”
From a chart standpoint, he placed resistance in the November contract at the “nice big round number” of C$700 per tonne. On the other side, nearby support comes in around C$670.
While a weather-related rally is possible, Derwin said canola was already well above the sub-C$600 per tonne levels seen in March.
“People need to be prepared to make sales and hedge some of their new crop, depending on what they have priced already,” said Derwin.
