CNS Canada — Canola futures on the ICE Futures Canada trading platform moved higher, following along with the Chicago soybean and soyoil markets during the week ended Wednesday.
Sentiment that the canola market was oversold, weakness in the Canadian dollar, and ideas that canola is undervalued compared to other oilseeds also helped lift prices.
But the rally is only temporary, as there’s nothing to push the market higher going forward, said Jerry Klassen, manager of GAP SA Grains and Produits in Winnipeg.
The market will remain under pressure, he added, until the logistics issues in Western Canada are worked out. Prices could also break lower alongside the Chicago soybean market, as values will likely come under pressure as South America’s soybean harvest progresses.
Prices will be stuck in a range of C$420-$436 per tonne for a couple of months, until the weather starts to warm up, Canadian grain movement improves and the fundamental picture for 2014-15 in the U.S. and Canada becomes clearer.
“We could see a C$30-$40 per tonne move on either side depending on where acreage estimates come in for the U.S. beans and Canadian canola,” said Klassen.
The trade already anticipates an increase in Canadian canola acres for 2014-15, with Agriculture and Agri-Food Canada’s first estimate calling for 21.62 million acres of canola seeded this spring, up from 19.94 million acres in 2013-14.
Statistics Canada will release its first farmer survey of planted acreage for the 2014-15 season on April 24.
The U.S. Department of Agriculture is scheduled to release its first acreage estimates for the spring of 2014 during its Agricultural Outlook Forum conference in Arlington, Virginia on Feb. 20 and 21.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.