In the constant battle between influences weighing on values or providing support for canola bids, last week came down to a battle between our rainfall versus their rainfall.
On the Prairies, starting Father’s Day, precipitation brought struggling crops a little bit of a boost at a critical stage in their development. The Prairies have been in their third consecutive dry year, with inadequate levels of topsoil and subsoil moisture.
Meanwhile, the U.S. Midwest and Plains yet again got a plentiful dose of precipitation. Wet conditions this spring made planting quite difficult, especially for corn and soybeans. Spring wheat managed to catch up as the planting season wore on, and finished slightly behind the normal pace.
The question for canola came down to this: would Prairie rains have more power over bids on ICE Futures than rains in the U.S., which sway Chicago Board of Trade corn and soybean bids? In the end, neither dominated the entire week, but each had their share of daily victories.
The insufficient rainfall on the Prairies over the Father’s Day weekend was outpowered by another soaking of the U.S. Midwest, which propelled soybean and corn prices upward. The spillover saw canola bids shoot up $4.70 to $6.80 per tonne on June 17.
That spillover strength from Chicago carried on the next day, as it pushed canola bids from the red into the green, with small gains of 50-90 cents per tonne. However, a forecast of rain for the Prairies kept canola prices in the red for most of the trading session.
That forecast won out last Wednesday as canola prices tumbled $5-$7.20 per tonne. Then the pendulum swung a little past the middle, to provide a small boost of 30 cents to $1.10 per tonne. To wrap up the week, a solid forecast of rain for the Prairies pushed bids down $1.50-$2.40 per tonne.
With seeding — and reseeding in some areas — wrapped up, one trader suggested the markets could enter a holding pattern for the next little while, although prices might go down a little bit. How much precipitation the Prairies get this summer will determine the direction prices will eventually follow.