ICE Futures Canada canola contracts moved higher during the week ending Wednesday (Nov. 27), as weakness in the Canadian dollar and gains in outside oilseeds helped canola bounce off of major support.
The most active January contract started the week just above $480 per tonne, a level that has not been significantly breached by the front month contract in over three years, but managed to finish well above that psychological point.
The Canadian dollar declined by over a cent relative to its U.S. counterpart during the week, helping crush margins improve by close to $10 per tonne.
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With U.S. markets closed on Thursday for Thanksgiving and only opened for a shortened session on Friday, the Canadian canola futures will be lacking direction from soybeans, which could lead to some choppiness in the short term.
“We could see some wild swings or increased volatility due to the thinness of the holiday trade,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
When activity returns back to normal in the first week of December, the general trend should remain sideways for canola, he said.
The $480 per tonne level is expected to remain a key support level to the downside, with resistance coming in around $500, he added.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
