By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Sept. 14 (MarketsFarm) – The ICE Futures canola market was sharply higher Tuesday morning, as the market reacted to declining production estimates from Statistics Canada.
The government agency lowered their estimate on the size of the 2021/22 canola crop to 12.8 million tonnes. That was down by nearly two million tonnes from the August estimate and well below the 19.5 million tonnes grown the previous year.
While the drought and need to ration demand has been factored into the futures for some time already, the confirmation from Statistics Canada was enough to spark a rally on Tuesday.
Gains in Chicago Board of Trade soybeans and soyoil were also supportive.
However, canola remains overpriced compared to other oilseeds with soft crush margins likely leading to some demand rationing at these higher price levels.
About 16,200 canola contracts had traded as of 8:50 CDT.
Prices in Canadian dollars per metric ton at 8:50 CDT:
Canola Nov 888.80 up 27.00
Jan 879.30 up 26.50
Mar 866.70 up 25.70
May 848.30 up 20.90