CNS Canada –– ICE Futures Canada canola contracts moved higher during the week ended Wednesday, but remain rangebound overall with offsetting market factors expected to keep values steady in the short term.
“The market seems, at least temporarily, reasonably balanced,” said Jon Driedger of FarmLink Marketing Solutions. “It’s that window of the year where there’s not a lot of new information, and everyone is waiting to get a sense of what the new crop will be like.”
Demand was steady from both exporters and the domestic crush sector, he said. On the other side, “supplies aren’t really tight, but they’re also not heavy,” he added.
The canola market will likely tighten up moving later into the winter, although Driedger said that might not necessarily translate into higher futures prices. Rather, any strength would likely show itself in basis levels in the countryside.
While canola is rangebound from a fundamental standpoint, Driedger said movement in CBOT soybeans and the Canadian dollar has the potential to provide some nearby direction.
From a chart perspective, March canola has traded within a range of roughly C$445-$465 per tonne over the past month, finishing right in the middle Wednesday at C$455.30.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.