Canola market rises amid harvest delays

Since bottoming in mid-September, ICE canola futures have trended gradually higher. The nearby November canola futures contract flirted with overhead chart resistance at $500 per tonne for a number of trading sessions, finally moving above that mark earlier this week.

Slow harvest progress across much of Western Canada continues to be price supportive for the canola market. Alberta’s latest crop report placed the canola harvest there at just over 20 per cent combined as of Oct. 2, only four per centage points higher than the previous week and still well behind the normal harvest pace.

The canola market will continue to derive underlying price support from the difficult harvest conditions, with about half of the overall Prairie crop still caught in the field.

Choppy trading

But trading has been choppy this week ahead of the U.S. Department of Agriculture supply/demand report coming out Oct. 11. The report is expected to show heavy soybean supplies.

Chart-wise, the short-term canola price trend remains higher with no immediate signal of a reversal lower. The nearby November canola contract is now trading above resistance at $500 per tonne, so the door is open to next level chart resistance at $507 per tonne. That would create the “swing target,” using the late September gain as measuring stick. After that, we have the August highs in the $510 to $512 per tonne area.

Soyoil strengths canola market

It's interesting to note Chicago soyoil futures have also lifted off contract lows established in mid-September. That strength in soyoil lent support to the canola market.

The extent and impulsiveness of the past couple weeks' gain is impressive, breaking a major chart downtrend and identifying the Sept. 19 low (US27.15 cents per pound) as the end to a long-term Elliott sequence on price charts.

That said, major bear trends such we have seen over the past year in soyoil do not just turn on a dime and keep going. Corrections can and should be expected. Still, I hope we are seeing an encouraging longer-term development emerging in soyoil that would lend further support to our canola market.


There is a sense the delayed harvest slowed farmer deliveries - certainly in the northern areas of the Prairies – and, in turn, thinned available canola supply moving through the commercial pipeline. As such, futures contract spreads (that is, November to January) are tightening modestly and cash basis is gradually improving. That's all in an effort to draw increased farmer selling, notably in the southern areas where harvest is more advanced.

As a result, we see Prairie cash bids trending gradually higher, to the point where bids as high as $11 per bushel for deferred December to January delivery are being in south-central Saskatchewan.

Most growers exercised patience before advancing cash sales this fall, with prices now edging higher. But remember, the upside price momentum will be hampered by a U.S. soybean market contending with record large 2018 crop prospects amid ongoing trade tensions with the world’s primary importer - China.

Bottom line

While a difficult harvest season remains a challenge for growers, price gains near-term can and will remain limited by large global soybean crop prospects.

Mike Jubinville of Pro Farmer Canada offers information on commodity markets and marketing strategies. Call 204-654-4290 or visit to find out more about his services.