Canola and wheat futures appear to head down to their respective price floor.

It seems to be the case for the ICE Futures November Canola contract, even though it was up roughly six dollars on the week. The contract closed Friday afternoon at $646.50, a decease of $25.20 on the day. Future Commodity Advisor with Ventum Financial Adam Pukalo says the Canola contract seems to want to hit the lower range of $640-620 as the soybean market and other grains also go down. He adds if soy and bean oils continue to fall, canola could drop by another 20 dollars “pretty quick”.

Weather in the U.S. has been a tale of opposites – the west side of the grain belt has been hot and dry but offset by better conditions in the eastern grain belt. Pukalo said open interest dropped by 17-thousand contracts as a result over the last two days, indicating that funds might be exiting their short positions, but noted there has been pullback over the same timeframe. Pukalo also noted a rally of 70 dollars from July 16 onward for canola, so it was an opportunity for farmers to sell with Pukalo hearing farmers were selling their canola between $14.50 to $15.00 a bushel.

The September Minneapolis Wheat contract meanwhile, was down by 8 cents on the week, closing Friday at 5.88 1/2 cents a bushel, down 15-and-a-quarter cents on the day.

Like canola, the wheat contract was trending downward to its floor price of $5.74-and-three-quarter cents, set on July 17. However, Pukalo says there is a more positive outlook for wheat. Results from a tour of Hard Red Spring Wheat in the U.S. showed some of the strongest yields since 1992.

The heatwave across the prairies has sped up crop development but there are concerns that if it continues it could lead to a decline in yield potential.

As far as external factors go, the Canadian Dollar has dropped to the 72 cent range, the price crude oil is down, but the U.S. Dollar has remained stable.