MarketsFarm — Any fanfare from the long-awaited production estimates from Statistics Canada released on Tuesday was gone by the next day.
ICE canola futures initially jumped by double digits that morning, but throughout that session the gains faded. By the end of Wednesday’s session, canola was down.
“The StatCan report came in right around expectations. I think it was viewed as neutral for the market,” said trader/analyst Jerry Klassen of Resilient Capital in Winnipeg.
Heading into those model-based principal field crop estimates, the average trade guess was at 17.4 million tonnes of canola for 2023-24. The StatCan report came in a little bit higher at 17.56 million tonnes. Nevertheless canola production this year will be well below the 18.7 million tonnes from 2022-23.
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Harvest pressure was already being felt in the canola market, Klassen said, despite the harvest being barely underway, but a good portion of Prairie canola has been swathed.
Manitoba reported its canola harvest five per cent complete as of Wednesday, while Alberta said its harvest was at one per cent done as of Aug. 22 and Saskatchewan was at four per cent finished as of Aug. 21. Saskatchewan is scheduled to issue its next report Thursday, followed by Alberta on Friday.
“The trade is monitoring harvest progress and it looks like we should see some pretty good progress. The canola harvest will likely move into full swing probably [by Labour Day],” Klassen said.
He also noted domestic crushers and export buyers are sufficiently covered at the moment, which has weighed on basis levels. The market is already anticipating a surge in farmer deliveries to start in the next couple of weeks, he added.
“Prices for wheat are low and the barley is coming under pressure, so it looks like the farmers are going to be pretty aggressive on their canola sales,” Klassen said, pointing to good weather in the long-range forecast.
Barring any significant delays in the Prairie canola harvest, he said export demand is very likely to pick up when the halfway point is reached.
“But farmer selling is going to dictate market direction on the canola rather than the demand.”
— Glen Hallick reports for MarketsFarm from Winnipeg.
