Resilient Prices: Canola and Wheat Hold Strong Amid Harvest Pressure
Canola and wheat prices have shown resilience despite harvest pressure in Canada. Portfolio Manager at Ventum Financial David Derwin notes that canola prices have been on a positive trend since the beginning of the year.
The November canola contract has been trading between $810 and $840 a metric tonne over the last two weeks, closing at $824.30 on Tuesday, down $10.90 from the day before.
Derwin believes that the 840 level is an overhead resistance point for canola prices, but notes that grain markets are still pointing higher, making it likely to break through this level soon.
In contrast, wheat prices have come under pressure due to ongoing fighting between Russia and Ukraine at the beginning of the month, causing supply concerns. However, Derwin notes that wheat has since come off by about 50-60 cents US a bushel but remains within a longer-term uptrend.
Derwin also expects harvest pressure to have more influence on cash prices than futures, as this season's production across the Prairies has been variable. He believes that there could be situations where there might be pockets of production that wasn't quite as hoped for, leading to premium prices on top-grade commodities once harvest is complete.