Soybeans have taken a fairly significant drop over the last month, and canola futures have followed somewhat.
Dave Siminot, Manager of CWB Pooling, explained the world is looking forward to a huge crop of soybeans and that is pulling canola down at the same time.
"Generally speaking Canola is a bit on it's own in the sense that it is differentiated from soybeans to an extent. It's largely a western Canadian crop and the soybean supply and demand situation is pretty balanced. There is no big surplus and the demand has been pretty stable or steady. Canola has been trading more or less on it's own fundamentals. At the same time it is influenced by soybeans and the soybean complex, we've seen prices come down over the last months. The U.S. is looking at planting very large acreage of soybeans. There is a big supply already and the South American crops of soybeans are expected to grow again."
Meantime, Siminot noted peas and malting barley are enjoying higher prices, a typical reaction for this time of year when supplies are running short.
He said Durum prices are dropping in the absence of much buyer interest, adding this seems to be a backwards scenario because if durum supplies are tight and if there are any production problems in the world these prices will go back up again.
He added a similar unique interaction between buyers and sellers is causing weaker export market values for wheat.