|Volatile Canola Market|
|Written by Neil Billinger|
|Friday, 21 September 2012 14:19|
A person could get seasick following canola prices this week.
There have been sizeable market fluctuations during four of the five days.
The Winnipeg November Canola futures started the week above $650 a metric tonne. Then it went below $620 a tonne before recovering mid-week and then dropping back down again. The November canola futures closed at $612.90 per tonne at the end of Friday's trade.
Errol Anderson with Pro-Market Communications in Calgary says the U.S. drought has not affected soybean yields as much as expected.
"Soybeans have been swinging wildly within a one dollar range between $16 and $17 per bushel."
Anderson says outside factors are also playing a role in the world edible oil market.
"Crude oil appears poised to break down below $90 per barrel, which could affect ethanol and corn prices. So, we are sensing in the near-term that commodity markets are in for some bumps that are really outside the control of the ag industry."
Canadian canola production is going to take a hit due to disease and damage from wind-blown swaths.
"Canada may likely run short of canola by spring. This is incredibly bullish fundamentally, but our market must adjust for the slowing global economy. Malaysian palm oil prices have dropped sharply over the past week and there is more evidence of an (economic) slowdown in Asia. When we mix all of these factors together, it suggests price volatility will be high as we enter October."
|Last Updated on Friday, 21 September 2012 14:29|