Canola prices climbed higher during the week ended June 5, despite strength in the Canadian dollar that would typically have a bearish effect on prices.
Nearby canola contracts started the week at $457.10 per tonne and posted losses on Monday before rallying on Tuesday. By June 4, nearby contracts closed at $463.60 per tonne.
The Canadian dollar was over 74 U.S. cents for most of the week, after holding around 70 U.S. cents since the start of the COVID-19 pandemic. Currencies around the world have been pushed up by comparable weakness in the U.S. dollar.
While a strong loonie is typically a detriment to canola prices, relative strength in comparable vegetable oils hasNsupported gains. Malaysian palm oil has been higher due to reports of lower ending stocks. European rapeseed stocks are also expected to drop significantly, though soyoil stocks are expected to increase slightly.
While exports demand from China has slowed considerably and shows no sign of returning, data from the Canadian Grain Commission showed canola exports to the European Union more than doubled in March, totalling 344,200 tonnes. That makes the EU the largest importer of Canadian canola.
Planting activity has also provided support to canola prices, as producers focus on seeding instead of farm deliveries. As of May 25, seeding in Saskatchewan was 80 per cent completed. In Manitoba, seeding is 88 per cent complete.