Bruce Burnett, Director of Weather and Markets with Glacier Farm Media says that's mainly driven by various factors affecting the broader oilseed market.
"I think there's a couple of major themes in the canola market that's happening right now," Burnett explained. "First of all, the broader oilseed market is focused on the U.S. soybean situation. We got some soybean area numbers on the past Monday, a week ago. They came in sort of in line with expectations, a little bit lower than maybe the market was expecting, but still pretty close."
He noted that the U.S. corn belt has had decent weather over the past month, which is also influencing the markets.
"Some pretty regular precipitation, and a little bit too much actually in parts of the Eastern corn belt. The western corn belt itself has seen some frequent showers. That happened on the weekend again, so the market is certainly looking at improved weather."
The canola market has been particularly affected by dry conditions in Western Canada. Burnett says canola acreage came in sort of within expectations on the last report, almost two weeks ago.
"Now, basically, it is lower than last year. So, there are concerns about yields this year. We've seen some very mixed conditions on the prairies, so that's certainly given the market pause for concern with canola itself over the past little while."
He notes soybeans are the big driver of the global oilseed markets, along with palm oil.
“So, we're seeing pressure in soybeans and soybean oil with basically good growing conditions for the U.S. over the past month or so. The crops been planted; it's in decent condition."
Burnett points out that the wheat market has also seen mixed conditions, again with weather playing a factor.
"We have drought concerns in Canada, parts of the Northern Plains, especially in Montana. And in the US, further south in the southern plains, where the winter wheat harvest is happening. And in the Southern Corn belt where the soft red winter wheat crop is being harvested."
Despite the bearish tone in the markets, Burnett remains cautiously optimistic. "Managed money funds are long canola, so that's maybe the one positive thing out there. That is also adding to the volatility in the canola market."
He points out that the U.S. harvest is beginning, and we're moving through the critical stages for the U.S. corn crop as well as the soybean crop.
As the US corn pollination progresses, Burnett expects continued pressure on prices.
"Corn pollination is underway in the US, which is the most critical part of that crop, and certainly we're seeing that prices are on the decline because of that."