ICE weekly outlook: Big crop keeps market under pressure

CNS Canada — ICE Futures Canada’s canola contracts were up and down during the week ended Wednesday, lacking any clear direction as values consolidated above the nine-month lows set the previous week.

“Canola is a follower and does not have a mind of its own,” said analyst Wayne Palmer of Agri-Trend.

The underlying fundamentals were relatively bearish, he said, with crop conditions across North America looking favourable overall aside from a few trouble spots.

Those good conditions and resulting expectations for large crops have end-users reluctant to make purchases, as “they can probably buy it cheaper from the farmer in September,” said Palmer.

It would likely take a weather scare somewhere in North America to spark a rally over the next few months, he added, but estimated the possibilities were remote given the stage of the crops.

Farmers are also reluctant sellers at current price levels, but would likely make sales if cash bids moved back above $11 per bushel, according to Palmer.

While producers will eventually need to sell, they may be able to hold off on off-the-combine canola sales this fall if wheat prices stay strong.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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