As we enter the second month of the year, one trend that has caught the attention of many economy watchers is the strength of the commodity sector. That is especially true in the agriculture segment of this part of the economy.
In its regular commodity price report, TD Canada Trust notes that the crop production sector has not been hit by the COVID pandemic. Demand for agricultural commodities has remained solid and prices for oilseeds – like soybeans and canola – have been especially strong.
Only lumber has had a stronger run than canola, according to the bank report.
While it expects the normal cycles to put downward pressure on canola prices, there are some factors playing in favor of continued strength – El Nina is one as the weather pattern is causing growing challenges in Central and South America – and prices are hitting levels we haven’t seen in 10 years.
While crops are doing well, the pandemic has hit livestock producers with dramatically lower restaurant demand but they see the arrival of vaccines as a turning point.
