MarketsFarm — The ICE Futures canola market was showing signs of running into resistance to the upside during the week ended Wednesday, as speculators booked profits on some of their large long positions.
The general uptrend, however, remains intact despite the minor correction.
While bouts of consolidation were not unexpected, “the trends are still upward and pointing higher,” said David Derwin, commodities investment advisor with PI Financial in Winnipeg.
“One thousand dollars is a nice big round number that will act like a magnet from both sides,” said Derwin. The January contract settled Wednesday at $1,010.70 per tonne, while March canola was at $982.80.
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Losses in Chicago Board of Trade (CBOT) soyoil futures pulled canola away from its highs during the week, but Derwin expected the Canadian oilseed would remain stronger relative to other vegetable oils due to its own supportive fundamentals.
“Canola is in a world of its own,” Derwin said, adding “we have very tight stocks… and unless we have very good yields and growing conditions, it will still be tight (in 2022-23).”
With prices as high as they are, Derwin noted canola could still see large price swings without influencing the overall uptrend.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
