Canola ($RSX21) jumped to NEW 52-week highs today up +27.80 (+3.13%) closing at $916.80s . Today marks the fifth consecutive day in the green for $RSX21 as the contract got as high as $949.00s intraday.
Canola prices continue to shoot through the roof as many of the crop’s largest growing regions in Canada and US continue to stay in drought like conditions. It’s worth noting, much of Manitoba continues to see no rain and most of Saskatchewan is as dry as a bone. Looking at the forecast, it doesn’t look like Manitoba or Saskatchewan will see the much needed rain in the next 7-10 days. In addition, North Dakota, the largest producer of Canola in the US, has one of the driest summers ever with little to no rain and extremely hot temperatures. Looking at future North Dakota weather… the state looks to see nothing but sunshine and 90 degree temperatures in the next 7-10 days. Traders know the crop is going to be low, but now the question becomes how poor will the quality be when it comes time to harvest? It’s also worth mentioning, many inside the trade believe $RSX21 will reach over $1,000.00s this year once demand realizes how much of a shortage there is going to be. Remember, all-time contract highs sit at $1,101.00 posted all the way back in 1974. Hopefully producers will be able to get some of their crop out of the field and take advantage of record prices! Below is a map of Canadian drought conditions as of June 30th,
2021 released by the Government of Canada: