Three factors will determine which way canola will move in the coming weeks – the Canadian dollar, the Prairie weather, and the Chicago Board of Trade, according to Errol Anderson of ProMarket Communications in Calgary, Alta.
“I’m expecting the Canadian dollar to move up a bit, just because of United States dollar pressure. That could pull the canola market down a bit,” he said.
Should that occur, Anderson believes canola will remain at the lower end of a sideways range until the end of June, but without any major moves.
As for the weather, if conditions worsen and push up prices, Anderson said there could be more movement in the local basis levels than in the futures.
He noted that Alberta is very soaked from the Edmonton area to the northern growing areas. Also, northwestern Saskatchewan has wet conditions, as does southeast Manitoba.
The third factor is the U.S. markets, which Anderson said have been largely on the defensive because of good weather. He believes corn, for example, could likely pull back into early July, stating he doesn’t buy the drop in crop conditions reported by the U.S. Department of Agriculture. On June 15, the USDA stated corn fell four points to 71 good to excellent.