CNS Canada –– ICE Futures Canada canola contracts moved higher during the week ended Wednesday, as traders began to position themselves in anticipation of a U.S. report due out Aug. 12.
The U.S. Department of Agriculture’s World Agricultural Supply and Demand Estimates (WASDE) report “is certainly a factor” in the direction of canola, said Keith Ferley of RBC Dominion Securities in Winnipeg.
He noted trading volumes were down, especially for the November contract, as traders covered themselves ahead of the USDA report, which is expected to lower its estimates of U.S. soybean sowings.
“There may be some longs taking positions off that,” he added.
Technically speaking, both near-term canola contracts have been testing support at the psychologically important $500 per tonne mark.
The spread activity has been extremely light and the options have been quiet, according to Ferley.
“Anything could happen on a low volume,” he said.
Canola also moved back under the 50-day moving average during Wednesday’s session, but Ferley theorized that could possibly bring in some spec selling.
While there are still concerns about the lateness of the crop, recent rains have helped to alleviate dry conditions in parts of the Prairies, according to participants.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.