Canola prices have come down a bit after higher prices earlier in the summer.
Jon Driedger is vice-president with LeftField Commodity Research.
"It's been in the last month or so, sort of chopping around in a little bit of a range...We did see the market pop up here a little bit earlier in the month, pulled back a little bit and that's maybe not all together surprising. We are approaching harvest, the crop for the most part in Western Canada looks quite good and so to see prices pause a little bit as we walk in towards harvest is not a shock, especially since the market had rallied up to a fairly high level here in the middle of summer."
While China has banned canola seed from Richardson and Viterra, Driedger says Canada is continuing to ship product through other channels.
"It has been flowing in through other ways. For example the UAE (United Arab Emirates), who was a big buyer this last crop year, they would buy canola seed and crush it and send the oil into China. Canola oil and meal imports into China are also up. In many ways, while certainly still well below what it would be back when relations were normal, we still are moving a fair bit of seed and canola product into China despite the geopolitical tensions."
He talked more about the current canola crop.
"Conditions are pretty good across most of Western Canada. There's pockets and regions that have their challenges, but the crop looks good. We'll be looking for an increase from yield over last year. Acres are down a little bit, according to StatsCan. We'll probably see a high production number. The good news is that demand has been strong this last year. We expect another good year of demand going forward, so despite harvesting a big crop I don't think that we'll see a year where supplies overwhelm the system and farms will struggle to move it."
Driedger adds we've got a good size crop coming but we also have strong demand to look forward too as well.
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