The Canola market is floundering as serval different factors are affecting prices and constraining a significant price rally, that’s according to Neil Blue, a provincial crops market analyst with the Government of Alberta.
In an article on the Government of Alberta website, Blue outlines that canola prices have eroded from last August and despite some seasonal growth, the oil seed continues to struggle to find momentum.
June saw prices move lower once again, coming close to February lows near $600/tonne for the November futures contract.
Blue says there are several factors affecting canola prices and constraining a significant price rally.
Despite the dryness in much of western Canada last summer, 2023 canola yields were close to average and much above the drought-reduced yields of 2021.
Canola prices are closely related to world vegetable oil prices.
Crops in the Canadian Prairies and the U.S. are in overall good condition to mid-July.
The U.S. soybean crop is rated as 68% good to excellent condition, higher than last year’s 57% rating in mid-July.
South American soybean production, despite being reduced in Brazil due to dryness, was high overall and is currently being marketed to the world.
Blue concludes by saying while prices have moderated from those of 2022, it is potentially profitable strategy to have target prices in mind and keep at least in casual contact with the markets to be able to take advantage of pricing opportunities when they arise.