ICE weekly outlook: Canola sideways, waiting for news

ice july canola
ICE July 2019 canola (candlesticks) with CBOT July 2019 soybeans (green) and 20-day moving average (yellow). (Barchart)

MarketsFarm — ICE Futures canola contracts moved lower during the week ended Wednesday, but remain stuck in a sideways trading range overall waiting for some fresh market-moving news.

“April is usually the quietest month of the year for us,” said Ken Ball of PI Financial in Winnipeg.

In addition to large world oilseed supplies overhanging the market, Canada is also still dealing with the lack of demand from China.

While canola prices are already near major lows, he expected the general trend remained pointed down “unless we get into some major weather issues in June and July.”

Some Prairie farmers are talking about reducing canola acres, “but not that much else is leaping out for them as an alternative,” said Ball.

“The China situation might scare a few people out of canola… but I don’t see any huge switches going on,” he said, adding that most producers were likely sticking to their rotations.

Statistics Canada releases its first survey-based acreage estimates of the year next Wednesday (April 24).

“Until this crop gets 50 per cent seeded, you probably have a sideways market here,” said Jerry Klassen, manager of Canadian operations with Swiss-based GAP S.A. Grains and Products in Winnipeg.

Beyond that, Klassen said aggressive farmer selling can often weigh on prices in July, while any serious weather problems during the growing season could provide support.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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