ICE weekly outlook: Canola markets remain sensitive to weather

ICE July 2019 canola with 20-, 50- and 100-day moving averages. (Barchart)

MarketsFarm — Canola markets were following trends set by soybean prices, as worries of late planting weighed on the minds of traders and farmers alike.

As corn planting comes to an end, prolonged wet weather has continued to delay soybean planting to the point where the growing season may be shortened.

“I think the market is starting to get worried, because two weeks from now we’ll be starting to wonder how we’ll get these beans in the ground,” one Winnipeg-based trader said.

Soybeans planted on soft red winter wheat acres will also be delayed because rain has slowed down the winter wheat harvest, the trader said.

However, with 1.1 billion bushels of carryover crop from 2018, producers would have to see “monstrous crop losses” in order for soybean markets to see an upset.

Canola markets are also keeping an eye on weather north of the 49th parallel as key growing areas in Saskatchewan remain without rain, keeping prices relatively firm.

Technical levels have been relatively strong, the trader said.

A meteorologist from Environment Canada doesn’t believe the Prairies will see rain for another week.

“It’s all weather at the moment,” said the trader.

“There’s enough weather in the forecast to keep traders pretty nervous.”

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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