WINNIPEG, Manitoba--Sporadic rainfall across the Prairies hasn't been enough to stop canola's upward momentum during the week ended July 19, while a pair of other factors are fueling the oilseed's rise.

The November canola contract went from settling below the C$800 per tonne mark (C$797.50/tonne) on July 12 to exceeding the C$850 mark for the first time since last November on July 19, rising C$44.20/tonne to close the week at $841.70. Canola was on an eight-day rally after trading finished on July 19, its longest since April 2021.

David Derwin, an analyst at PI Financial in Winnipeg, said while canola fields in southern Manitoba are looking golden and healthy, looks can be deceiving.

"There are still a lot of dry patches and a lot of concern for what yields are looking like. But having said that, a lot of people are saying everything is looking really good," Derwin said. "The weather is what seems to be dominating the stories recently."

Canola was also benefiting from carryover from United States soybean futures. The August soybean contract went up 47.25 U.S. cents per bushel to US$14.9150 during the week, while August soyoil went up 1.71 U.S. cents per pound to 66.05 during the same span.

"Canola has also had a nice additional push at the same time as soybeans since the U.S. Department of Agriculture changed the acreage numbers for soybeans (earlier this month)," Derwin said.

Prices were also lifted by Russia's withdrawal from the Black Sea Grain Initiative on July 17 and its subsequent attacks on the Port of Odesa.

"(The situation) is what's pushing prices for all the grains up, including canola," Derwin added.

If November canola continues at the previous week's pace, the C$900 mark could be surpassed by the end of the month. However, Derwin said it's anyone's guess if or when that level will be reached.

"Never say never when it comes to the markets," he quipped. "From what I've read (the period) until the end of July will be the same in terms of dry and hot. Could it be C$900 by the end of the month? Sure, that's not out of the question."


Source: Commodity News Service Canada, news@marketsfarm.com


(END) Dow Jones Newswires

07-19-23 1704ET