Glacier FarmMedia | MarketsFarm — Canola prices could shift up or down in the coming weeks due to uncertainty, said Jerry Klassen, analyst with Resilient Capital in Winnipeg.
One factor that could push canola lower is the weather outlook for the Canadian Prairies.
“We got some pretty good rains in the forecast,” Klassen said, noting that about 40 per cent of the region had dry conditions.
However, he said there was uncertainty over the amount of canola planted this year and what the crop would yield. Any continued lack of rain would impact potential yields.
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Statistics Canada will issue its crop acres report on June 27. In March, StatCan projected 21.6 million acres of canola to be planted in 2025, down 1.7 per cent from a year ago.
To Klassen, it’s unlikely planted canola acres would drop any further given how prices have increased this spring. He believes the amount seeded with either remain largely the same or increase.
Another element of uncertainty is China, with Klassen pointing out that country’s investigation to alleged canola dumping by Canada is still ongoing.
“There’s a bit of caution here as to how high the market can go, until some result is known,” he said of canola prices.
Klassen said Chinese authorities could announce the investigation’s results at any time, but he suspects such might not come until towards the end of the year.
He said he believes there is behind-the-scenes discussion going on between Ottawa and Beijing to resolve that issue and tariffs the two countries have on each other. That includes China having 100 per cent levies on its imports of Canadian canola oil and meal.
“Until you see that crop widespread, blanket rains or see something from China, the market is going to be well supported,” Klassen said. “Canola has shown us it can swing quite sharply in a short amount of time.”
