ICE weekly outlook: Canola stronger at midweek

ICE January 2021 canola with 20-, 50- and 100-day moving averages. (Barchart)

MarketsFarm — ICE Futures canola contracts were stronger on Wednesday, making up losses incurred earlier in the week.

The nearby January contract closed Wednesday at $545.80 per tonne, gaining over $10 since closing at $534.90 on Monday.

Record-high temperatures in parts of the Prairies were part of the reason behind canola’s rally. However, temperatures are forecast to drop over the weekend.

“Producers are moving seed, getting ready for next year, and doing other things besides being big sellers on this small bounce,” Keith Ferley of RBC Dominion Securities in Winnipeg said.

The soy complex has also been a supportive of canola’s rally, as data showing record-setting exports in September pushed soybeans to double-digit gains on Wednesday.

The CBOT January soybean contract closed up by 22 cents at US$10.86 per bushel.

Gains in the Canadian dollar have tempered canola prices, as weakness in the U.S. Dollar Index was supportive of the loonie. At midday Wednesday, the dollar was just over 76 U.S. cents.

Prolonged uncertainty regarding the outcome of the U.S. presidential and congressional elections has plagued financial and commodity markets, with mail-in voting counts delaying the outcome for an indefinite period.

Millions of votes in key states have yet to be counted, though incumbent Donald Trump has falsely declared victory. Currently, Democratic nominee Joe Biden is leading with the electoral and popular vote, though it will be some time before the results are finalized.

— Marlo Glass reports for MarketsFarm from Winnipeg.

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