(Commodity News Service Canada) — Canola contracts traded on the ICE Futures Canada platform are showing no signs of letting up in their well-established uptrend, and while a profit-taking correction was possible, a market analyst said the path of least resistance still remains pointed higher.
Darren Frank of FarmLink Marketing Solutions at Oakville, Man. said the strong global demand for vegetable oil, particularly from China, was showing no signs of letting up.
Both Canadian canola exports and the domestic crush pace were running ahead of the year-ago level, which means prices will need to increase in order to ration some of that increased demand, he said.
“The veg oil fundamentals are just bullish right now, and I don’t know what will slow it down,” said Frank.
Oilseed markets, including canola, would likely remain pointed higher until participants get a better handle on the South American soybean crop, which is unlikely until at least December, he said.
Looking at the charts, Frank said canola continues to set fresh highs. “I don’t see anything right now telling me to start selling,” he said.
Frank added that an expected slowdown in farmer deliveries, as producers finish their post-harvest selling, should add to any firmer tone in canola. However, he added, producers would likely come in as sellers on a scale-up basis.
“If we get any type of correction between now and Christmas, it will be very minor,” said Frank.
In the near term, the U.S. Department of Agriculture releases updated supply/demand tables on Tuesday (Nov. 9) and any surprises in that report could send canola one way or the other, according to Frank.