ICE weekly outlook: Farmers look for rallies

CNS Canada — As the last remaining days of harvest tick down, farmers are beginning to look for rallies to sell into, according to an analyst in the market.

“The farmer continues to struggle out there, but seems content to sell into the rallies. I don’t think they’re selling into the breaks,” said Keith Ferley of RBC Dominion Securities in Winnipeg.

It was a volatile time for canola futures during the week ended Wednesday, largely due to sharp losses and gains in soyoil.

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“There’s maybe some people moving stuff around too,” he added.

The front-month January contract lost $2.80 per tonne on the week while the March contract declined $2.60.

Ferley on Wednesday noted the March contract had also overtaken January in volume.

“There’s heavy spread trade; January/March is the feature here and it’s overshadowing some of the outright trade in the canola,” he added.

Strength in the Canadian dollar was another factor contributing to canola’s softness during the week. The loonie started the week at the US74-cent level but climbed to roughly US74 1/2 cents by week’s end.

Chicago Board of Trade soyoil also fell slightly lower after its up-and-down week.

On the other side, crushing activity was extremely busy, which propped up values.

China also continues to show interest in canola and other oilseeds, which was good news for Canadian exporters.

The final crop report out of Saskatchewan indicated four per cent of the province’s canola crop was still left in the field — slightly more than many market watchers had expected.

Eyes now turn to the latest crop estimate from Statistics Canada, due out next week.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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