CNS Canada –– ICE Futures Canada canola suffered small losses during the week ended Wednesday, with both the July and November contracts chopping around the $520 per tonne mark.
Losses in the Chicago Board of Trade (CBOT) soy complex weighed on canola. However, it lagged the U.S. market while receiving support from declines in the value of the Canadian dollar.
The loonie dropped roughly two cents in value between Friday’s close and midday Wednesday, which helped canola keep its footing.
“From a chart perspective, between the first week of May until now, we’re kind of in an evolving sideways market,” said Mike Jubinville of ProFarmer Canada in Winnipeg.
Weather conditions across Western Canada were generally favourable for the development of canola, which could indicate some upcoming softness in values, he added.
“The seasonality of the canola markets, from a historical perspective, typically suggests that when the canola crop is in the ground mid-June and things are off to a good start, that’s usually the time we roll over.”
Softness in vegetable oil has also undermined prices, with Malaysian palm oil futures hitting their lowest point in four months on Wednesday.
At times, Jubinville said, canola has ranged between the $510 and $530 per tonne level.
However, he said, recent support for the nearby contract is closer to $520 per tonne.
“The overall trend line is still up and you could probably draw the 20-day moving average underneath that,” he said, adding, “this market is looking as to where it is going to go next.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.