Dry weather in Canada is fueling speculative canola prices

The Canadian Prairies received rain last week, bringing temperatures down to normal and stressing canola crops. No significant precipitation is expected this week, especially in Saskatchewan, leading to speculative price increases.

As of July 10, 84% of canola in Saskatchewan was in fair or good condition, and 45% in good or excellent condition in Alberta (66% 5-year average).

November canola futures on the Winnipeg exchange rose 0.5% yesterday to CAD 834/t or $632/t (+5.8% for the week, +16% for the month).

In the US, the number of soybeans in good or excellent condition for the week rose 4% to 55% (61% last year), but on forecasts of dry weather, November soybean futures in Chicago rose 1.2% to $512.6 yesterday /t (+3.9% for the month). Traders are carrying out speculative purchases of the new crop, so prices for it will soon reach those of the old crop, although the growth will somewhat limit the fall in oil prices.

On the exchange in Paris, August rapeseed futures yesterday rose by 1.6% to €477.25/t or $535.6/t (+3.2% for the week, +1.7% for the month) against the background harvest delays due to rains and increased demand from the biodiesel industry.

In Ukraine, since Monday, the purchase prices for rapeseed rose by another $15-20/t to $370-375/t or UAH 14,500-15,500/t with delivery to Black Sea and Danube ports against the background of rising world prices and delays in product deliveries in the period active shipments from Danube ports.

Traders use the Black Sea ports to stockpile goods with subsequent shipment by car to the Danube ports and transshipment in the port of Constanta to large-tonnage vessels, which doubles the logistics costs for delivery to the EU, up to $100-120/t.

EU rapeseed demand remains low, with buyers offering €425-430/t on DAP Germany for October-November deliveries only.