CNS Canada –– ICE Futures Canada canola futures moved lower during the week ended Wednesday, but managed to find some support to the downside and are looking rangebound overall.
Canola is still looking firm relative to Chicago (CBOT) soybeans, said broker Ken Ball of PI Financial in Winnipeg.
While solid commercial demand was one supportive factor in the market, he said speculators buying canola and selling beans were another underlying factor.
Those speculators are “playing it back and forth” and when the spread gets too far one way, they will turn around to sell canola and buy soybeans.
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The May canola contract finds itself in a $20 range between $450 and $470 per tonne, with nearby technical indicators pointing sideways. Whether it breaks higher or lower will depend on what happens with CBOT soybeans.
“Canola will always follow (soybeans), it’s just a question of whether it will be relatively weak or relatively strong,” said Ball, adding that movements in the Canadian dollar could also provide some direction for canola.
While it is still early, attention is starting to turn to spring weather conditions. If the weather co-operates, Ball said, many farmers will be aiming to begin seeding in mid-April.
Conditions are looking relatively favourable across much of Western Canada, but there are also some areas where dryness may be a concern, said Ball, noting market participants will also be looking at any weather-related news “to sink their teeth into,” in both Canada and the U.S.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
