ICE weekly outlook: Canola breaks out of week-long funk

ICE november canola
ICE November 2019 canola with 20-, 50- and 100-day moving averages. (Barchart)

MarketsFarm — It’s unclear yet what effect Thursday’s satellite field crop estimates from Statistics Canada will have on markets.

Canola broke out of a six-day funk Wednesday, trending just slightly higher for the first time since Wednesday last week. Technical biases remain to the downside, as prices hover around contract lows.

“There are a lot of balls in the air,” said Mike Jubinville, an analyst with MarketsFarm.

About a quarter of the Prairie region has experienced challenging growing conditions that will result in “lesser than average” yield potential, he said.

About 15 per cent of the key canola-growing region is in the “transitional stage, where you have some good and some bad,” and the rest of the region will have the potential for strong yields.

Harvest activity often pressures prices at this time of year, due to the surge in farmer deliveries.

“Just the same, it’s certainly discouraging for a lot of growers who are looking at some of the worst canola prices in years,” Jubinville said.

Unco-operatively cool and wet weather has the potential to damage crops before they come off the field, which could inject a weather premium back into the market.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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