CNS Canada — The ICE Futures Canada canola market pulled higher during the week ended Tuesday, following heavy gains in the U.S. soy complex which advanced to its highest point in five months Tuesday.
Traders were keenly observing Tuesday’s 2015-16 Statistics Canada acreage report which called for 19.84 million acres of canola in Western Canada. That forecast was at the high end of traders’ expectations but still below last year’s output. In 2014/15, 20.24 million acres of canola were seeded.
Ultimately, however, traders mainly focused on Tuesday’s U.S. Department of Agriculture report, which was bullish for canola.
Traders expect much of the focus will shift back to the weather situation in Western Canada, which has been dominated by extremely dry conditions in both Alberta and Saskatchewan.
“We still need to water these plants and that’s what the markets going to be focused on,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
Mike Jubinville of Pro Farmer Canada said the month of July will be extremely crucial to the crop’s chances.
“We are looking at a situation where forecasted hot temperatures next week will moderate as the week goes forward, but there’s still no blanket rainfall in the forecast,” he said, adding other crops are also under pressure.
“We started this season thinking we’d have a 16 (million) to 17 million-tonne canola crop, than it went to 14 to 15, now most trade ideas are sinking into the 13 million-tonne category; that’s not a lot of canola.” he added.
From a chart point of view the next logical target for the most-active November contract would be the $540 per tonne mark. The contract crept as high as $537.10 per tonne before Tuesday’s close. — Commodity News Service Canada