Canola futures prices rose after Statistics Canada forecast a crop that
is only half the 10 year average.
But canola and oats analyst firm Statcom Ltd. said for significant
gains, soybeans will also have to rise.
Stats Can verified trade expectations that the prairie canola crop will
be small, just 3.2 million tonnes.
Statcom expects November futures to push at the present $450 per tonne
resistance level, but if soybeans rise, canola could go to $470.
Holders of canola will probably try to wait and force cash prices
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higher, but buyers could back away from the market.
Prairie oat production will be up from last year by 11 percent, but
will still fall far short of the five-year average, according to
Statistics Canada.
Statcom Ltd. oats analyst Randy Strychar said Stats Can’s oats numbers
are generally bullish, but in an unusual way.
Traders had seen this spring’s huge acreage of oats slowly shriveling
in Alberta and Saskatchewan, but had only shaved their production
estimates between 2.85 million and three million tonnes. Stats Can set
the crop at 2.3 million tonnes.
However, the production area that really counts for milling oats
production, Manitoba and eastern Saskatchewan, will provide a big crop
and buyers there should have little trouble finding supply, Strychar
said. But western mills will probably be short about 150,000 tonnes
this fall and will have to bid for eastern prairie crops.
“They’ll try to drag some of those crops west,” he said.
Prices will be kept healthy by this competition from western mills,
Strychar said.
Strychar thinks producers will look at the situation and demand high
cash prices. Given the competition, they can probably get away with it.
If prices fall during the harvest rush they probably won’t drop below
$2.60 per bushel, which will probably be the year’s low point, Strychar
said.
The price range he’s looking for is $2.85 to $3.40 per bu. after
harvest in southern Manitoba. The eastern Saskatchewan price should
range from $2.75 to $3.30 per bu.
Strychar said the December oats futures contract should trade in the
range of $1.70 to $2.20 US per bu. It’s now at $1.86.
The field pea estimate was higher than many observers expected,
according to STAT Market Research, but will still be the smallest crop
since 1996.
The Stats Can report was a shot in the arm to wheat prices on American
commodity exchanges, which hadn’t expected the crop to fall far beneath
the most recent United States Department of Agriculture estimates.
