ICE weekly outlook: Weather, U.S./China relations influence canola

(Dave Bedard photo)

CNS Canada — Traders’ attention at the ICE Futures Canada canola market has now turned to western Canadian weather and news south of the border.

While there was a reprieve from the drought over the last week, with rain falling in parts of Western Canada, large areas missed out on the moisture. More rain is in the forecast in upcoming days for the eastern Prairies.

“(There’s) lots of variability out there, that’s the hard part. You get pockets where they’re still hurting for rain and in other areas, (like) Alberta specifically, they don’t mind the drydown,” said Keith Ferley of RBC Dominion Securities in Winnipeg.

Alberta has been on the wetter side and is expected to have dry weather, which will help for producers to get some seeding done.

“Trying to get finished up on seeding and the weather will be the key here over the next few weeks, two months, as far as how things develop,” Ferley said.

Seeding progress looks good in Manitoba and Saskatchewan. Manitoba Agriculture released a crop report Tuesday estimating 80 per cent of seeding is complete, ahead of the five-year average.

However, there are reports that some canola has had to be reseeded, according to Ferley. What’s called “sand-blasting” has caused plants to be blown away after emergence.

Traders are also paying attention to relations between the U.S. and China. News over the last few days has hinted there could be a possible trade deal reached between the two countries.

“The big unknown obviously is this China/U.S. trade negotiations,” Ferley said. “Are they going to see a big jump in soybean export sales to China? Or is this just another head fake and then we go back to some kind of a trade war?”

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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