By Glen Hallick, MarketsFarm
WINNIPEG, July 16 (MarketsFarm) – Canola futures on the Intercontinental Exchange (ICE) were higher at midday Friday, with the largest gains in the front months.
The drought on the Prairies could further erode canola yields more than recently estimated. While participants have predicted a crop of 16 million to 18 million tonnes, some have begun to wonder if a harvest as low as 12 million tonnes is possible.
The lower production will inevitably further press already tight supplies, according to a Winnipeg-based trader.
“We got to get [demand] down four to five million tonnes, maybe six million. That’s a major task,” the trader stated, in calling for more price rationing in the market.
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“The canola crop looks bad now. I don’t know what it will look like in two weeks,” he added, noting that some canola has already been written off as insurance adjusters race around the Prairies.
There was more support for the Canadian oilseed coming from strong upticks in the Chicago soy complex, as well as increases in European rapeseed and Malaysian palm oil.
The Canadian dollar was lower, providing additional support to canola. The loonie was at 79.43 U.S. cents compared to Thursday’s close of 79.54.
Approximately 10,400 canola contracts were traded as of 10:39 CDT.
Prices in Canadian dollars per metric tonne at 10:39 CDT:
Price Change
Canola Nov 922.30 up 10.20
Jan 905.80 up 8.20
Mar 882.90 up 2.60
May 861.90 up 1.60
