ICE rapeseed futures showed significant price fluctuations during the week

Rapeseed futures showed significant price fluctuations during the week ending June 10, trading in a range of approximately C$50 per tonne. Although futures ended the week lower, one trader expected the overall upward trend to continue.

November canola futures reached a contract high of C$804.80 per tonne on June 3 and fell to a near-term low of C$755.50 three days later.

In subsequent trading sessions, prices stabilized, reaching C$774.50 per tonne on June 10.

“I think we can see significant price increases in the canola market over the long term,” said Bill Craddock, a Manitoba farmer and longtime local futures trader. While volatility in foreign markets also leads to unpredictability in canola prices, he saw several potential factors supporting the Canadian oilseed.

Western Manitoba and eastern Saskatchewan experienced heavy rainfall on June 9-10, with Stonewall, Manitoba, receiving more than 250 millimeters, according to Environment Canada. Winnipeg received 117 millimeters of rain overnight, and many other areas also saw over 100 millimeters after heavy rains the previous weekend.

“If we get nine inches of rain, that would be a real challenge, but at higher elevations, the crop will still be harvested,” Craddock said.

“I think the summer will be unpredictable in terms of weather, which will lead to market instability,” Craddock said. In addition to excessive rainfall causing flooding in parts of Manitoba, he expected increased storm activity in the United States to boost Chicago soybean futures prices.

According to Craddock, high canola processing margins were another favorable factor, and robust export demand suggests that Canadian canola supplies may be limited this year.

Recent optimism about peace talks in the Middle East has weighed on oil prices, but Craddock expected oil prices to eventually rise as countries deplete their strategic petroleum reserves. He said there was a possibility that oil prices could reach $150 per barrel, “and that would really cause problems.”

Any strengthening in crude oil prices would lead to higher vegetable oil prices, further supporting canola.

The ICE canola futures market posted strong gains on Wednesday as excess moisture in parts of the Canadian Prairies led to flooding of fields. The rainfall is likely to result in some crop losses.

Western Manitoba and eastern Saskatchewan were hit hardest by recent thunderstorms, with Stonewall, Manitoba, receiving more than 250 millimeters of rain, according to Environment Canada. Winnipeg received 117 mm of rain overnight, and many other areas also saw rainfall exceeding 100 mm, following heavy rainfall over the previous weekend.

Rising foreign markets provided additional support, pushing up prices for crude oil, Chicago soybean oil, European canola, and Malaysian palm oil.

The Canadian dollar remained relatively stable after the Bank of Canada left its key overnight lending rate unchanged.

On Wednesday, 62,108 trades were executed, compared to 72,998 on Tuesday.

Spreads accounted for 44,628 of the total number of contracts executed.

Settlement prices are quoted in Canadian dollars per metric ton.

July 766.40 – up 6.30;

November 774.50 – up 6.70;

January 783.20 – up 6.40;

March 789.90 – up 6.20.

Tags: prices, rapeseed