MarketsFarm — ICE Futures canola contracts were seeing choppy activity in mid-July but were under pressure overall, closing at their weakest levels in six months on Wednesday.
Relatively favourable Prairie weather, speculative long-liquidation, and pressure from outside markets all weighed on values with more losses likely if no weather concerns develop.
“The weather looks fairly decent across the Prairies,” said Jamie Wilton of RJ O’Brien in Winnipeg, accounting for the latest selling pressure in canola.
“I think it’s only a matter of time before we break lower,” said Wilton. Although he added that a turn to hot and dry weather could provide the catalyst for a move higher.
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That said, any attempts at rallies have been failing recently.
While the November contract has held above the psychological $800 per tonne level for the time being, Wilton expected prices may need to break below that point to encourage demand again.
Fund traders are also still long and liquidating in the U.S. futures, with that selling pressure spilling into the canola market.
In addition to the weather, recession fears and activity in the currency markets were also having an influence on the oilseed markets, according to Wilton.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
