MarketsFarm — ICE Futures canola contracts moved higher during the week ended Wednesday, but lagged the Chicago Board of Trade soy complex to the upside as the spreads between the two markets saw some readjustment.
“If you had bought 100 tonnes of March canola on Dec. 21 you’d be up about $10 per tonne right now,” said Ken Ball of PI Financial in Winnipeg. “If you had bought the equivalent of (soy) oil and meal, you’d be up by over $150 per tonne.”
The drought and tight supply situation had caused canola to run up relative to soybeans over the past few months.
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Those concerns are generally factored into the futures, and now soybeans are finding their own strength on the back of South American production concerns and a rally in palm oil, according to Ball.
“It’s been a big shift,” he said, noting canola will likely be a little more responsive to moves in the soy complex now that the Canadian oilseed is no longer so overpriced.
March canola moved above both its 20- and 100-day moving averages during the week, but at $1,022.50 per tonne on Wednesday it was still about $15 off its own highs.
March soybeans, meanwhile, hit new contract highs every day of the past week.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
