Canola, Wheat Prices Defy Harvest Pressure with Long-Term Upside

Despite recent harvest pressure, canola and wheat prices have shown long-term strength, according to David Derwin, Portfolio Manager at Ventum Financial. Since the beginning of the year, canola prices have been trending upwards.

The November canola contract has been trading between $810 and $840 a metric tonne over the last two weeks, closing on Tuesday at $824.30, down $10.90 on the day. Derwin notes that this price level has acted as an overhead resistance point, with prices consistently dropping back after reaching it.

Wheat prices have also been affected by ongoing fighting between Russia and Ukraine, which caused supply concerns in early October. However, since then wheat prices have come off by around 50-60 cents US a bushel, but remain within a longer-term uptrend.

Derwin believes that harvest pressure will be more apparent on cash prices rather than futures markets, as this season's harvest has been variable across the Prairies. He suggests that there may be a premium price for top-grade commodities once the harvest is complete.