CNS Canada — ICE Futures Canada canola contracts have a softer tone, but are likely to stay rangebound in the short term, one analyst says.
“We’re not looking for a significant breakout,” said Jerry Klassen, manager of Canadian operations with Swiss-based GAP SA Grains and Produits in Winnipeg.
He pegged canola’s short-term range between $450 and $475 per tonne.
Harvest pressure is one feature limiting gains, though unfavourable weather has helped push prices up on the week.
“We’ve had a couple of better weeks for harvest; this week isn’t too great,” Klassen said. “But we’re having the canola come into the system anyway.”
Snow and rain in parts of Western Canada had a bullish effect on canola prices, as it limits farmers’ ability to get into fields and could hurt crop quality.
Spillover advances from the Chicago Board of Trade soybean market also helped underpin prices on the week, but will likely act as a bearish feature moving forward.
“I think we’ve got a little psychological spillover weakness from the beans, as they continue harvesting south of the border, that’s also capping us on the upside,” Klassen said.
If prices edge higher, farmer selling could serve to push them back down, he said, but added that fall tends to bring strong demand, which could prop up the market going forward.
Since last week, canola prices have gained $2.80 in the November contract, closing at $467 on Wednesday.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.