ICE weekly outlook: Canola bids return to being range-bound

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MarketsFarm – Until the New Year expect canola bids to remain range-bound much like it was during the summer, according to one Winnipeg-based analyst.

“Canola going C$10 lower isn’t out of the question,” commented David Derwin, commodity portfolio manager with PI Financial.

Below normal temperatures on the Prairies coupled with rain and snow have provided support for bids, the blizzard during the Thanksgiving long weekend was to have generated a rally. That never fully materialized, said Derwin.

And for the last two weeks the Canadian dollar had been on a tear, vaulting above 76 U.S. cents and hitting three-month highs. The loonie made canola more expensive, leading buyers to look elsewhere.

The soy complex on the Chicago Board of Trade was influencing canola bids as well, especially soyoil. Derwin noted that soybeans also have become range-bound, and currently sit at the high end.

However, there was an exception as speculators pushed canola lower despite whatever direction Chicago soy was taking. That made commercial buyers quite pleased, said Ken Ball, a trader at PI Financial.

Pending this week’s provincial crop reports, the canola harvest across the Prairies stood at about 80 per cent complete. Muddy fields widespread across the region made combining difficult. Some farmers indicated they were prepared to leave the crop out there until the spring. How much of it will be has remained uncertain so far.

Even a brief meeting between Canadian and Chinese officials in Geneva to discuss canola didn’t make much of a blip in prices. Little tangible progress was made, but it was a start to rectifying China’s ban on canola imports from Canada.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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