MarketsFarm — Although canola prices have been somewhat erratic over the last weeks, they along with other oilseeds have generally rebounded, according to trader Ken Ball of PI Financial in Winnipeg.
Ball commented there has been a good amount of short-covering in soyoil at the Chicago Board of Trade, as markets positioned themselves for an announcement from the U.S. Environmental Protection Agency. The EPA had been scheduled to unveil on Wednesday its blending requirement for biodiesel from now through to 2025.
“That’s been the main driver of the whole oilseed complex for the couple of weeks,” Ball said, noting the trade has been expecting an increase in the EPA’s requirements.
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However, the agency postponed its announcement to June 21. In turn, that initially pushed down prices for soyoil, which already had been oversold, but later the commodity turned around to push higher.
Ball cautioned that the last time the EPA made such an announcement it resulted in sharp drops in soyoil and other vegetable oils.
Other than whichever path soyoil takes, another determining factor in canola prices has been the Prairie weather. Dry conditions continued on the western half of the region, with the eastern portion somewhat better off, moisture-wise.
Alberta on Wednesday received rain in northern and southeastern areas, with dry canola fields and other crops getting doused with much-needed moisture. Ball said the rain would pressure canola values.
A weather market should remain in place at least until the end of June. At that time, Statistics Canada will release its first survey-based planted area estimates for 2023-24; the U.S. Department of Agriculture will also publish its latest acreage estimates on June 30.
— Glen Hallick reports for MarketsFarm from Winnipeg.
