Winnipeg -- Canola prices are on the verge of dropping back, said Tony Tryhuk, director of futures trading for RBC Dominion Securities in Winnipeg.
That's especially so when below normal temperatures across a good part of the Canadian Prairies begin to improve.
"If things warm up, seeding starts to progress as normal and some of the flood conditions in Saskatchewan ... then we're looking forward to some pretty robust plantings this year," Tryhuk said.
"And that should be negative to prices," he continued. "I see a significant amount of downside in futures prices from where we are today, if there isn't a weather scare, a big seeding delay or other adverse conditions."
To Tryhuk, canola prices are more than what farmers need to be profitable.
During the week ended May 6, the July canola contract topped out at C$763.90 per tonne and its November contract reached C$763.20.
With the United States and Iran reportedly on the verge of signing an agreement to end their war, there's the strong likelihood of a selloff among commodities, including canola.
When it came to the stocks report from Statistics Canada, Tryhuk was skeptical about its numbers.
StatCan released its stocks as of March 31 report on May 6, showing on-farm canola stocks at 8.52 million tonnes compared to 6.54 million a year ago. Commercial stocks increased to 1.47 million tonnes from 1.29 million.
"We know historically that report has underestimated on what farm stocks actually are," Tryhuk said. "Take the March 31 number, subtract deliveries between then and the end of July, you often result in a negative on farm stocks."
He said unless StatCan's estimate for canola was within 500,000 tonnes of either side of trade expectations, that no one is going to trade the oilseed based on that number.
"Given the methodology in collecting these stock figures, I don't think the trade puts a lot of faith into them," Tryhuk said.
Source: MarketsFarm (Glen Hallick, news@marketsfarm.com, or 204-782-5944)
(END) Dow Jones Newswires
05-06-26 1702ET
