A grain market analyst is expecting this year’s record dry spell in Saskatchewan to push up wheat and canola prices during the coming marketing year.
Neil Townsend with Farmlink Marketing Solutions says drought in the U.S. has pushed up prices but there is room for more upward movement after the impact of dry weather on the Canadian harvest becomes more apparent.
“I look at the February, March, April, May period. That could be the highest transactional prices of the year,” Townsend said. “That’s when I think the difference between the futures and the cash prices will be the lowest.”
Townsend, says prices have reached a plateau for the past month. But he believes the winter months will see further movement upward, particularly for wheat and canola.
“I think we’re going to see some dynamic prices changes in the canola market,” Townsend said. ” And again, I target that period of next year. Any signs of trouble with the planting conditions, or anything like that, and I think you’re going to see really strong desire by people who use canola to have coverage.”
Townsend says wheat and canola markets have eased off a bit during the past month but he believes there is room for price increases during the marketing year because of lower crop production in Western Canada.