MarketsFarm — ICE Futures canola contracts held relatively rangebound during the week ended Wednesday, looking for some direction to push values one way or the other.
“We’re just watching South American weather now,” said Jaimie Wilton, commodities futures specialist with RJ O’Brien in Winnipeg, pointing to the drought in Argentina and the relatively favourable conditions for soybeans in Brazil.
From a chart standpoint, the March contract has been stuck in a range between roughly $800 and $900 per tonne for the past six months and Wilton expected that sideways pattern would continue, barring an outside catalyst.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
“If you run (futures prices) up to far, you run into a demand hole,” said Wilton, adding “if it goes down too low you get new demand.”
In addition to any surprises in South American weather that could shake up the markets, Wilton said news out of the Ukraine/Russia conflict was also being followed closely.
China’s shifting COVID-19 measures and their potential influence on demand from that country could be another factor to watch.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
