Developing a Canola marketing plan? Consider the seasonal price patterns
LETHBRIDGE, AB. — When it comes to marketing commodities, farmers are aware there is a long list of factors to consider. It can be anything from crop availability in a specific region or country, or a competing crop in the largest production areas, as well as demand for those crops, which will have the greatest influence on a crop’s price.
Neil Blue, provincial crops market analyst with Alberta Agriculture and Forestry, brings it down to its simplest form — “The main price determining factors for most commodities are supply and demand, and that is true for canola prices.”
“Therefore, from the supply side, prices tend to follow the production cycle of a crop. To help with their pricing decisions, crop marketers should be aware of seasonal price patterns of crops that they produce.”
Blue elaborates by noting that Canola prices tend to hit a low during the September/October period when there is abundant supply. “Harvest progress, yield reports and buyer demand all affect timing of harvest price lows. After a harvest low, prices usually rebound as harvest selling pressure subsides and as demand again becomes evident.”