CNS Canada — ICE Futures Canada canola futures ended slightly higher for the week ended Wednesday. All of the contracts eked out minor gains, but it was largely seen as a frustrating session for the near-term November contract, which again failed to settle above its technical resistance point of $480 per tonne.
Funds largely pushed back and forth during the latter stages of the session, said a trader. But with ideas the crop will continue to get larger in future Statistics Canada surveys, the long-term outlook appears bearish.
“We’re probably just going to chop around quite a bit over the next few months,” said Ken Ball of PI Financial in Winnipeg.
The market doesn’t have a lot of fresh news to dig its teeth into, which makes it tough for large swings to happen one way or the other, he said.
Another analyst said he feels many stakeholders are leery of entering the market right now, for fear the large funds could leave them out to dry.
“Many players are intimidated by the funds, because if the funds come in and you’re short the market, it will make your life miserable,” said Wayne Palmer of Agri-Trend Marketing, also in Winnipeg.
Open interest continues to increase, said Palmer, which indicates farmers are delivering and crushers are crushing.
“But the crush margins aren’t great.”
Right now, Palmer and many other participants are closely waiting to see if the near-term contract can’t conquer the $480 per tonne barrier.
If the November contract can close above it for once, it could be the catalyst the market needs to move higher, Palmer said.
“If we close over $480, the fireworks begin and we’re going to $500. We’ve been bouncing off $480 for the last two weeks.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.