ICE weekly outlook: Canola backs off two-year highs

ICE November 2020 canola (candlesticks) with 20- and 100-day moving averages and CBOT October 2020 soyoil (blue line). (Barchart)

MarketsFarm — ICE Futures canola contracts have shown weakness in recent trading sessions, after hitting two-year highs last week.

The November canola contract, which closed Sept. 16 at $530.20 per tonne, has since lost over $10, closing Wednesday at $519.60.

“Last week when canola moved up very strongly, it just sort of got ahead of itself,” remarked David Derwin of P.I. Financial in Winnipeg, noting speculative trading was behind a lot of canola’s rally.

“It’s not unusual for the market to take a break, as some of that buying behind it goes back out of the market.”

Harvest activity is also partially behind some of the pressure on canola prices, as about 78 per cent of Manitoba’s canola crop has been harvested.

Losses in Chicago soyoil also kept pressure on canola prices. Nearby Chicago soyoil contracts have lost over two cents on the week, with the October contract closing Wednesday at 32.69 U.S. cents/lb.

— Marlo Glass reports for MarketsFarm from Winnipeg.

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