A second snowfall on the Prairies this month provided support to canola prices even as farmers planned to seed a record acreage.
The snow and rain that fell during Easter weekend and again April 23-24 increased worries that farmers will be under extreme time pressure this spring, especially those who have yet to harvest crop left over from 2016.
The cold and wet will push more of the unharvested canola into the category unfit for human consumption.
This weather problem offset the bearish Statistics Canada seeding intentions report April 21 that pegged canola at 22.39 million acres, up about 10 percent from last year and a new record high.
The new crop November contract fell when the report came out but partly recovered as the day progressed.
And by the close of trade April 24 the price was back where it was before the report came out.
Old crop May and July contracts did not fall at all. Indeed, the most-traded July contract had closed higher for eight straight trading days by April 24, posting a gain of about $30 a tonne or six percent over that period.
In the same period, July soybeans rose only 1.9 percent, so canola gained on its rival.
Canola’s strength is focused in the old crop because of the expectation of tight year-end stocks.
New crop months face downward pressure from the expected record soybean acreage in the United States and rising palm oil production in Indonesia and Malaysia.
Expect the spread between old and new crop months to remain fairly wide.
How high can July go? It depends on how far crushers and exporters have committed themselves for the rest of the crop year and how desperate they will become to pry the remaining bushels from farmers.