ICE weekly outlook: Canola looking for a spark
Recent declines in crude oil, diesel seen as bearish
| 1 min read
ICE November 2023 canola with 20-, 50- and 100-day moving averages. (Barchart)
MarketsFarm — The ICE Futures canola market hit its lowest levels in three months on the last trading day of September but has since uncovered some support in the first days of October.
Canola “has found a level where it’s stabilized, but there’s not a lot of life right now,” said Ken Ball of PI Financial in Winnipeg, adding that “all canola needs is a little spark, and it’s just not getting it right now.”
With seasonal harvest pressure slowing down and crush margins historically wide, Ball expected canola futures could be due for a move higher.
However, he added, speculators were still leaning on the short side of the market and showing a reluctance to buy.
“It will need some help from (soy)bean oil,” said Ball on what could trigger a sustained rally in canola.
However, while he expected that market should be stabilizing, recent losses in crude oil and diesel were bearish.
From a chart standpoint, the November canola contract has found support at around $710 per tonne, with $725 acting as nearby resistance.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
