CNS Canada –– ICE Futures Canada canola contracts were rangebound for the week ended Wednesday, but managed to post slight gains overall as a weaker Canadian dollar supported values.
“Weakness in the Canadian dollar is the underlying supportive factor,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
Funds are very long right now, he said, with roughly 38,000 to 40,000 contracts in play.
“We’re just starting to see some moving forward; they’re not exiting their positions, they’re just rolling their positions forward,” said Ferley.
From a technical standpoint, there is room both to the upside and downside right now, he said. However, unless values fall significantly lower, Ferley said, the funds will likely stay put.
“You could see them add to those longs if we keep pushing higher,” he said.
Farmer selling is steady while new-crop has attracted a lot of interest. Ferley said he’ll be looking for pricing opportunities.
“We’re finally seeing November (contract) look a little friendlier on the charts, finally busting out to the top side and that could be a bigger story as we go forward.”
Futures broke above the key resistance level of $440 per tonne in the past week.
The Bank of Canada has indicated it may slash the main interest rate yet again. Ferley said that’s one decision he’ll be watching in the days and weeks to come.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.