ICE weekly outlook: Count on canola remaining rangebound

ICE November 2019 canola with Bollinger (20,2) bands, a gauge of market volatility. (Barchart)

MarketsFarm — Despite three reports to be released between now and Thursday next week, canola is very likely to remain rangebound along with other oilseeds, said David Derwin of PI Financial in Winnipeg.

Statistics Canada on Friday will release its report for grain stocks as of July 31; then the federal agency issues its satellite-survey production report on Sept. 11. The next day, the U.S. Department of Agriculture (USDA) releases its monthly supply and demand report.

The reports “could lend some volatility” to the markets, but expects canola to go sideways before it would rise in price, Derwin said.

“It still comes down to the fact that one of the biggest buyers, China, is not as far as we know, back in the market in any significant way.”

Other than fulfilling previously signed contracts, China has bought very little canola from Canada since the arrest of a Huawei executive in December.

Plus, the spread of African swine fever throughout China has devastated its hog industry and significantly reduced the country’s demand for oilseeds.

Added to that is the large old-crop carryover of canola, just as Western Canada’s harvest is ramping up, Derwin said.

Despite delays in seeding this spring, the crop’s slow development and recent rains slowing harvest, he said farmers can easily catch up if they get a good window of opportunity with the modern equipment they use.

Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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