CNS Canada — ICE Futures Canada canola contracts are lacking any clear direction at the beginning of May, and may stay rangebound through the seeding period.
“Canola is stuck in neutral,” said Wayne Palmer, senior market analyst with Agri-Trend Marketing. “We’re at that stage where it’s rangebound, waiting for news, and watching the weather across the Prairies.”
“It all depends on weather, seeding, and what the American market does,” he said; farmers were “cash-rich” for the time being and not selling, as most had enough money to get themselves through until they see a good start to crop development.
According to a Statistics Canada survey conducted in March, Canadian farmers only intended to plant 21.4 million acres of canola in 2018. That would be down from the 23 million seeded the previous year.
Average trade estimates had been for an increase, and most industry participants still expect to see a new record seeded area.
“That (acreage) number will be much, much higher when it’s all said and done,” said Palmer, forecasting the crop at closer to 24 million acres.
“We have an abundance of canola now, and we’ll have even more canola when it’s all said and done unless we get a drought somewhere in North America.”
Current cash bids for both old- and new-crop were looking profitable, he added, and suggested it would likely be a good idea for producers to price some canola.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.