Wild Weather Boosts Canola Futures as Drought, Hail Pummel Crop
(Bloomberg) -- Too wet in some areas. Too dry in others. A hodgepodge of heat, hail and heavy rain is pummeling chunks of Canada’s canola crop and raising speculation wild weather may curb output of the oilseed.
Swaths of northern Alberta and Saskatchewan are dealing with excessive moisture, while growing areas in parts of central Saskatchewan have received less than 40% of average rainfall, according to the nation’s agriculture department. Canada is the top grower of canola, an oilseed used in everything from salad dressing to deep-frying, and crop prices are trading at the highest levels since late March amid the weather woes.
“It’s a real hodgepodge,” said Ken Ball, a senior commodity futures adviser at PI Financial in Winnipeg, Manitoba. “If we have a significant production problem, it could be trouble.”
Dry conditions have delayed the emergence of canola in Saskatchewan while wet, cool weather has hampered crops in northern Alberta, according to provincial agriculture ministries. The bulk of Alberta’s canola crop is grown in northern areas that are so wet “it’s swampy,” said Errol Anderson, president of ProMarket Communications.
Seeded acres will probably be lower than forecast as some farmers were unable to plant in areas that were too wet and recent hail storms damaged crops, Anderson said.
“There’s not enough heat units, there’s too much water,” Anderson said by phone. “There’s going to be issues going into the fall market.”
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