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.
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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.
