MarketsFarm — Although canola has continued to be rangebound, one analyst believes prices are due for a downward shift toward the low end of the spectrum.

“Gravity is going to pull it back down to the low end of the range, and $10-$15 [per tonne] wouldn’t be surprising,” said David Derwin, an analyst with PI Financial in Winnipeg.

Canola has been chopping up and down for the last six months, without any major direction to guide it, he said.

While Derwin doesn’t expect any other significant changes in canola prices for the next several months, he said if there were to be such, it would likely be a seasonal shift taking place during February and March.

He also noted the Canadian dollar has been quiet for the last several months. The loonie has generally remained above 75 U.S. cents and at times has slipped over 76 cents.

Despite Statistics Canada pegging the 2019 canola crop in its latest estimates at a four-year-low of 18.6 million tonnes, Derwin said that figure really doesn’t matter too much.

Rather, he said, the important element is the amount of demand.

There was almost no effect on prices stemming from the latest supply and demand report issued yesterday by the U.S. Department of Agriculture (USDA), he said.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.