ICE weekly outlook: Canola values stuck in a range

ICE Futures May 2020 canola with 20-, 50- and 100-day moving averages. (Barchart)

MarketsFarm — Canola prices came off of the long weekend in the green, but quickly gave back those gains at midweek, remaining stagnant and rangebound.

While rail blockades across the country have hampered rail activity and backed up grain shipments, cold weather has slowed down farmer movement for canola. That has insulated canola prices from some volatility.

“Because of slower farmer selling, we don’t have heavy pressure by any means,” said Keith Ferley of RBC Dominion Securities in Winnipeg.

The Canadian dollar has been “bouncing back and forth,” failing to provide any significant direction to canola prices.

At midweek, nearby contracts were between $459 and $467. As month-end nears, traders are rolling their March positions into May, which has also kept a lid on canola prices.

Ferley expected canola to remain “choppy and two-sided” until news of China’s COVID-19 coronavirus outbreak improves. As of Wednesday, the virus’ death toll rose above 2,000, and over 74,000 people have been infected. However, the rate of infection appears to be slowing down.

“We’re waiting to see what China does,” he said, explaining that outside markets, as well as commodity markets, are waiting for China’s buying to stimulate the economy.

— Marlo Glass reports for MarketsFarm from Winnipeg.

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