CNS Canada — ICE Futures Canada canola traders may already be looking ahead to the release of Statistics Canada’s next production estimates, as lacklustre trading amid the holiday season leaves investors searching for direction.
StatsCan is scheduled to release its final principal field crop report of the year on Dec. 6. The report is usually a key indicator of where prices could be headed.
“That (report) could change things,” said Keith Ferley of RBC Dominion Securities. “The general feel is the numbers will be much higher than the last survey.”
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
The government agency on Aug. 31 pegged production at 18.2 million tonnes. However, a few weeks later, StatsCan released a satellite-based report, which estimated the crop at 19.7 million tonnes.
The disparity led analysts to offer their own general estimates, which generally ranged from 19 million to 22 million tonnes.
Ferley feels that if December’s report comes in at the low end of that range, it could act as a negative force on futures.
Other factors impacting the market include the direction of the Canadian dollar and foreign demand.
“Are we going to see China come into the market in a bigger way and book some business here?” Ferley said, adding that export activity seems to be quite low right now.
On the charts, canola’s dominant January contract has been locked in a range of $514.50 to $520 per tonne.
“There’s also some support around the $511.70 and $512 area,” Ferley said.
Funds are long in the market right now and don’t look to abandon ship, he said.
“They will continue to add to the buy side if the market stays higher.”
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.
