MarketsFarm — ICE Futures canola contracts remain stuck in a sideways trading range to start the New Year, with bearish outside forces countered by relatively supportive fundamentals.
From a chart standpoint, March canola is stuck in a sideways range between $800 and $900, with little to suggest a break one way or the other for the time being.
“I don’t think there’s a hard consensus about where we go next… I don’t have a solid opinion up or down right now,” MarketsFarm Pro analyst Mike Jubinville said.
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He noted the U.S. Department of Agriculture is set to release several key reports on Jan. 12, which could provide some nearby direction to grains and oilseeds.
“From a demand perspective we look ‘OK’ on canola,” said Jubinville, but he added larger macroeconomic issues may weigh on the commodity.
“There’s a macro wet blanket sitting on top of us,” he said, pointing to recessionary concerns, worries about inflation and rising interest rates, the ongoing conflict in Ukraine, as well as COVID-19 issues in China and potential implications for demand.
However, wide canola crush margins suggest domestic demand from processors should remain strong, while Jubinville expected to see a solid export program despite increased competition from Australia this year.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
