Canola oil has been following the same path as soybean oil during the past month. Additional support for higher canola oil prices is come from the following factors:
- Weak Canadian dollar
- Strong export expectations in September
- Slow pace of farmer selling
Looking forward an early frost is a concern because the general canola crop is 2 to 4 weeks behind normal development. This was due to varied planting times across Canada, where some crop could be harvested as soon as 3 weeks. There is an expected 7 percent decrease in Canola production this year, but with the high carry in from last season the supplies of Canola oil are expected to be close to last year's levels. So I expect Canola to follow the trends of Soybean oil for the time being.