In order to get Canadian farmers to plant at least the same amount of canola this spring as they did last spring, they are likely going to need a premium, said Jerry Klassen, analyst with Resilient Capital in Winnipeg.
Canola futures were trending higher to start the New Year, with the nearby technical signals showing more room to the upside. However, continued strength will require additional outside support.
When canola trading begins returning to normal come Jan. 5, the oilseed’s futures are likely to fall back, said Tony Tryhuk, trader with RBC Dominion securities in Winnipeg.
ICE canola futures saw some choppy activity during the week ended Nov. 26, falling below nearby support at one point before clawing back from those losses to continue their steady uptrend of the past two months.
Canadian canola futures are poised to slip back in the short term, although the oilseed could climb slowly higher in the long term, said Jamie Wilton, trader with R.J. O’Brien in Winnipeg, Man.
Canola futures trended higher during the week ended Oct. 15, with the November contract settling above its 20-day moving average for the first time in nearly a month. Optimism over thawing trade relations with China contributed to the gains, although the lack of any concrete movement to end the stiff tariffs on Canadian canola seed or oil tempered the advances.