MarketsFarm – Canola has remained trading in a range for most of the week, with short coverings a feature in trading.
Canola values have been well-supported by Malaysian palm oil values, which were stronger for most of the week due to tight supplies and lowered production. On Tuesday, benchmark palm oil contracts hit their highest levels since January 2018.
The United States Department of Agriculture (USDA) will release their World Agriculture Supply Demand Estimates (WASDE) on Friday. Some traders are anticipating that soybean production will be lower than originally predicted, which would provide an upside to soybeans and spillover support to canola values. However, other traders believe the USDA news won’t be so positive.
“Canola could struggle if the news wasn’t as bullish as they’d hoped,” remarked Keith Ferley of RBC Dominion Securities.
Though China has begun importing Canadian pork and beef again, there hasn’t been any movement regarding canola imports.
The U.S. and China were set to sign phase one of their trade deal in mid-November, but the meeting was cancelled due to local protests in Chile. Since then, several locations have been proposed for the meeting, but none have been agreed one. The deal may not be signed for several weeks.
“I don’t think we’ll get away from this choppy two-sided trade until things are a bit more hammered out,” remarked Ferley.