CNS Canada — Canola futures on the ICE Futures platform moved higher during the week ended Thursday, as the market corrected off of the lows hit in late November.

Gains in Chicago Board of Trade soybeans and a smaller 2018 Canadian canola crop contributed to the advances, although values may not have much more room to the upside, according to an analyst.

Canola “can maybe bubble up a bit, but it won’t hold,” said Errol Anderson of ProMarket Communications in Calgary. The CBOT soybean market was looking like it could turn lower, which would weigh on canola, he said.

“This arrest thing just ratcheted this whole thing up,” said Anderson, referring to the arrest of Meng Wanzhou, a top executive with Chinese technology company Huawei and daughter of the company’s founder, by Canadian authorities at the request of the U.S.

The arrest was linked to U.S. sanctions against Iran and is seen as threatening the tentative trade truce reached between the U.S. and China during the G20 summit in Buenos Aires.

While the tentative truce brought some optimism to the soybean market, no actual soybean business was reported and the arrest news was seen as bearish for commodity prices.

Looming South American soybean crops are another bearish influence in the background, and Anderson recommended that canola farmers take advantage of pricing opportunities when they arise rather than hold on.

Canola likely had another $20 to the downside, he said, noting “the world doesn’t care about the cost of production.”

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.