CNS Canada — A downward trend in oilseed markets is likely to weigh on canola, one analyst says, as year-end trading has already scaled back prices.
Since last week, ICE Futures Canada canola has lost $5.10 per tonne in its March contract, closing Wednesday at $503.60.
“The big issue is we’ve got some year-end factors kicking in here. We’ve got a lot of money moving around in the currencies, and even in the grains,” said Ken Ball of PI Financial Corp. in Winnipeg.
The Canadian dollar gained more than one per cent against its U.S. counterpart on the week, which pressured canola.
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“But the big thing is the soybeans seem to have turned into a downward pointing market,” Ball said.
Chicago Board of Trade soybeans have a bearish tone, as upcoming supplies from South America are looming, while North American stocks of the oilseed are ample.
“There’s an awful amount of soybeans out there; that’s going to be the dominant force for the next little while,” Ball said.
There are still about six to eight weeks of uncertainty regarding Brazilian and Argentinian production, which leaves room to the upside in coming sessions, he added.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
