By Glen Hallick, MarketsFarm
WINNIPEG, Dec. 3 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were hitting new contract highs at midday Thursday following the release of the latest Statistics Canada report on principal field crops.
The federal agency dropped its estimate on canola production from 19.4 million tonnes in September to 18.7 million.
“Everybody was looking for a number lower than the previous estimate and it came in well under the trade consensus,” a Winnipeg-based trader commented.
He said the dry conditions on the Prairies from July to September certainly hurt the canola crop.
Now the main concern is price rationing as the current pace of canola exports and domestic use means Canada will run out of canola before the 2021/22 crop year, the trader stated, noting exports and the crush need to slow down.
He pointed out the market currently remains inverted.
“That tells the farmer we need your canola now, not later on,” the trader said, adding the inversion is unlikely to continue for much longer.
Strength in the Canadian dollar wasn’t holding back canola. The loonie was at 77.64 U.S. cents, compared to Wednesday’s close of 77.32.
Approximately 26,400 canola contracts were traded as of 10:55 CST.
Prices in Canadian dollars per metric tonne at 10:55 CST:
Canola Jan 588.60 up 9.00
Mar 584.50 up 8.40
May 580.10 up 7.40
Jul 573.80 up 6.40