ICE Canada: rapeseed hits a 2024 high

The July rapeseed contract hit a high of CAD 672.20 per metric ton on Wednesday and ended the day at CAD 665.60. The increase for the week was CAD 16.30 per metric ton. The November contract closed at CAD687.80 with an increase of CAD18.50 for the week.

David Derwin of PI Financial in Winnipeg identified multiple factors contributing to recent canola price gains, including funds covering their net short positions and seasonal strength.

“Canola has been falling for six to nine months, down from last summer’s highs. Some are just recovering, and that could still be the situation,” he said, adding that the effects of the soybean complex in Chicago and weather-related problems in South America have also brought support.

“Soybeans are up $1 a bushel from the lows. It’s also causing some canola buying,” he said. “We may still have strength for the next month or so.”

While canola appears to be following Chicago soybean oil in the short term, Derwin believes canola is actually reacting to soybean meal price trends.

Recent prairie rains have created a situation where moisture could put pressure on canola prices, but delayed planting could also support them. According to Derwin, one can only guess how this summer will pan out.

“You talk to so many people on the prairies, and everyone’s opinion is so different that there’s not necessarily a major factor,” he said. “But people are keeping canola in the ground and it’s cool, so there have been frost concerns because of how cool it gets at night.”

Derwin said it’s not out of the question that the new canola crop will hit the $700 Canadian per ton mark, believing it could go even higher.

“Even a period where the price could hit 720 or 725 Canadian dollars would be 16 Canadian dollars per bushel. There is still some room,” he added.

Tags: rapeseed, prices, Canada