Home Crop Monitoring Tight supplies continue wide spread between new and old crop canola

Tight supplies continue wide spread between new and old crop canola


When you’ve been following the canola markets, it’s been an interesting story, to say the least. There’s been a pretty big spread with new crop and old crop canola costs, and many are asking the query: when will they meet up?

Jon Driedger, of LeftField Commodity Analysis, says in concept that spread — which is at present upwards of $100/tonne — ought to meet up sooner or later, nevertheless it’s positively not a provided that they may. Driedger says that is partly attributable to excessive tightness in provide.

“It’s a little unpredictable and hard to say how that’s going to play out on the futures side, and part of the reason I say this is because I do think for canola futures — specifically in this current crop year — we are going to see a lot of erratic trade and more volatility. As well, probably less liquidity as we go forward, because supplies are simply dwindling at a rapid pace on-farm,” Driedger explains.

The truth that we’re coping with document excessive costs, and an all the time unsure China commerce state of affairs, performs into this too.

“Let’s say in a somewhat more normal price environment, you could expect some narrowing of that spread, some convergence of sort, or at least a coming together. A little hard to say that’s going to be the case of how that plays out this year, probably at least to a certain extent,” Driedger says. “But I think that it’s going to be unpredictable and again, there’s just going to be so little canola left that I think it’s just going to get really erratic, with low liquidity, and all those things. So it’s a little harder to predict how that July comes off the board, for example. Those unique circumstances this year create kind of a wild card.”

Wish to hear extra? Hearken to Driedger’s full dialogue on the t0pic throughout this Q&A!


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