CNS Canada –– ICE Futures Canada canola contracts eked out minor gains for the week ended Wednesday. The increase, however minimal, may have come as welcome relief to a market caught in the grip of large global oilseed supplies for several weeks.
“Canola will hang in here until there is a bullish sentiment that can run the funds in either down south or up here,” said analyst Wayne Palmer of Agri-Trend Marketing in Winnipeg.
Sideways trading is likely the norm for the next few days, he said, as very little generally happens around the U.S. Thanksgiving holiday. Most funds are well-positioned to cruise through the holiday with a large number of short positions in tow.
“Farmers aren’t selling it either; they have good cash flow until next year,” Palmer said.
He doubted anyone is really interested in unloading contracts right now at these prices, but in 2016, things may start to change.
“Any kind of a spark or weather issue in South America, with the amount of grain that is being shipped to the end-user, could impact the price and send us rolling to the upside,” he said.
Some may consider the next possible price change to come when the U.S. Department of Agriculture releases its next monthly supply and demand report Dec. 12, but Palmer isn’t holding his breath.
“This report will probably just confirm what the November report confirmed: there’s a large crop out there, but the demand is also there.”