MarketsFarm — ICE Futures canola contracts held rangebound during the week ended Wednesday, climbing to their strongest levels in two months at one point before running into resistance and retreating to trade well off those highs.
“We’re still stuck in a trading range,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
Activity in outside markets, including Malaysian palm oil and U.S. soybean futures, accounted for some of the movement in the Canadian oilseed within that range.
On the one hand, palm oil futures climbed to record highs during the week, which provided some support.
“Palm oil is the leader and is keeping a bid underneath canola,” Ferley said.
However, bearish yield and stocks data from the U.S. Department of Agriculture weighed heavily on Chicago Board of Trade soybeans during the week, with some of that selling pressure spilling into the canola market.
Ferley said canola was likely lagging soybeans to the downside, though, as the U.S. soybean harvest is only half complete. Meanwhile, the canola harvest is already done, limiting the amount of seasonal harvest pressure in the Canadian oilseed.
From a chart perspective, January canola hit a session high of $924.50 per tonne on Friday and a low of $885.70 on Tuesday, before settling Wednesday at $893.90. Longer-term support comes in around $850 per tonne.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.