Glacier FarmMedia COVID-19 & the Farm

ICE weekly outlook: Canola choppy with outside markets

(Dave Bedard photo)

CNS Canada –– ICE Futures Canada canola contracts were up and down during the week ended Wednesday, but managed to post gains overall as a weaker Canadian dollar and spillover from the advances in CBOT soybeans provided support.

Whether strength in canola will continue remains to be seen.

“All of these gyrations of late (in canola) have to be viewed within the broader context of the macroeconomic environment,” said Mike Jubinville of ProFarmer Canada in Winnipeg.

Large swings in financial and energy markets are bringing more speculative money to grains and oilseeds, he noted.

“It’s just a whole mess of money flow sloshing back and forth between various places,” he said, and that confusion is working its way into agricultural markets as well.

From a fundamental standpoint, the record-large U.S. soybean crop overhanging the market does remain bearish for canola. Canadian harvest pressure is also working its way into the futures.

However, from a technical standpoint, canola has some room to the upside. Jubinville noted fund traders are still holding large short positions, which could lead to a larger short-covering bounce if some upside technical levels are breached.

For the November contract, he placed resistance at around $415-$420 per tonne.

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

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