MarketsFarm — ICE Futures canola contracts moved lower during the week ended Wednesday but remain rangebound overall, as market participants continued to await a clearer picture on the size of the 2019 crop.
“The overall grain and oilseed complex still feels heavily weighted, but I’m hoping for at least a short-term bounce,” said Mike Jubinville of MarketsFarm Pro in Winnipeg.
Results of a survey conducted by Statistics Canada in July and released Wednesday pegged this year’s canola crop at 18.5 million tonnes, which would be down by about two million tonnes from 2018-19.
“If this crop is a little smaller than most people think, then maybe that’s a microcosm of support for the market,” said Jubinville — although “it’s not enough to be a game changer,” he added, noting good conditions in August likely helped increase yield potential.
“We’re still dragging along in rangebound trade, as we have for two months now.”
Canola futures had a mixed response to the Statistics Canada report, with the November contract up by only $1.50 per tonne on the day, to settle at $447.90.
Fund traders are still holding large net short positions in canola.
Jubinville expected a move above $450 per tonne could inspire some fund short-covering and a short-term bounce in the futures.
— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.