Glacier FarmMedia COVID-19 & the Farm

ICE weekly outlook: Canola up but hitting resistance

(Dave Bedard photo)

CNS Canada — ICE Futures Canada canola contracts moved higher during the week ended Wednesday, as values start to rebound slightly in the face of the advancing Prairie harvest.

Despite moderate gains, one trader sees resistance ahead for values.

“It is going to be tough to rally very far; buyers are going to back away pretty fast in this environment,” said Ken Ball of PI Financial in Winnipeg.

Favourable harvest weather over the past few weeks has enabled farmers to make solid progress on the harvest, he explained, adding the bulk of the crop should be harvested by the latter stages of next week (Oct. 13-17).

The U.S. Department of Agriculture is scheduled to release its monthly crop production and supply/demand report on Friday. Between now and that time, Ball expects pressure to build on the market from traders who don’t want to get caught in unfavourable positions.

“All the markets have shown some new term lows that might hang in for a while. Canola has a new low that just might hang in depending on how low the bean situation gets,” he said.

Pinning down any solid guesses of canola yields is especially difficult right now, he said; at last glance, estimates were “all over the place.

“Traders know canola will be tight but it could be extremely tight or moderately tight. Don’t know where to put it right now.”

South America also factors into the equation, Ball said.

“It will be a tough year to get significant rallies going if South America gets off to a decent start with their oilseed crops. The whole oilseed complex will be weighed down if that happens.”

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.


COPA Medallion COPA finalist in 2012, 2014 and 2015.
©2021 AGCanada is a production of Glacier FarmMedia Limited Partnership. Any affiliated or third party content is the property of its respective owner and is used with permission.
Please refer to Copyright Page for details.
Click here to view our Website Terms of Use.