CNS Canada –– ICE Futures canola contracts were mixed during the week ended Wednesday, with the most-active January contract feeling pressure from declines in the U.S. soy complex.
With the harvest over and no major reports scheduled within the next seven days, it is difficult to see canola breaking very far one way or the other on its own, according to Ken Ball, analyst with PI Financial in Winnipeg.
“Nothing unusual, the meal premium is fading away. Doesn’t mean we’ll crash straight down, but U.S. markets could see some pressure for a little while, which will weigh on canola,” he said.
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Some of the more deferred canola contracts were slightly higher for the week, likely supported by strong demand from both crushers and exporters, according to Ball.
“Exports are running at a solid clip. That will keep it somewhat underpinned,” he said.
China’s purchases of oilseeds tapered off last week — another feature Ball is watching.
“They still bought a bunch of seeds but it was much reduced from the previous week so that’s going to be key for the oilseeds in general.”
The next big report market watchers see on the horizon is on Dec. 4, when Statistics Canada will release its final production numbers for the year. That should give the industry a better sense of how big the crop really is, Ball said.
“If canola numbers stay on the low end of the scale it will project to be a tight canola market by spring,” he said.
Large commercials groups are likely staying busy trying to find contracts for the new year, according to Ball.
“They don’t want to be chasing farmers for canola in April, May and June. They would prefer to get as much of it bought right now,” said Ball, noting this would also help keep the market underpinned.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
