CNS Canada — ICE Futures Canada canola contracts were mixed during the week ended Wednesday, with losses in the front months and a firmer tone in some of the more deferred positions.
The most active January contract lost $5.40 per tonne during the week, while the March contract was only down 40 cents.
As a result, the inverse that had been built up into the market has now disappeared, which indicates the nearby demand may be filled for the time being.
However, farmers have turned rather bullish in the short term, which is supporting canola and limiting the downside potential, said Ken Ball of PI Financial in Winnipeg.
Canola, he noted, is also looking relatively cheap compared to soybeans, which was also somewhat supportive.
Ball said the lows were likely in for the time being, but noted the January canola contract faces a resistance band in the $440 to $450 per tonne area.
“It’s hard to tell if those numbers mean too much, as it will be beans and meal that determine the next move in canola,” said Ball.
“There could be lots of volatility still to come,” he added, noting the U.S. is sitting on a record-large soybean crop and soymeal supply tightness is starting to show some improvement.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.