CNS Canada — ICE Futures Canada canola contracts moved lower during the week ended Wednesday, but finished the week well off of their nearby lows as some support was uncovered to the downside.
Barring a surprise in Statistics Canada’s planting intentions report, due out Thursday, canola futures are looking rangebound for the time being.
Fund traders, who had been holding a large net long position as recently as a month ago, are now sitting on a relatively neutral position, according to Keith Ferley of RBC Dominion Securities in Winnipeg.
“From a technical standpoint, the July contract is right in the middle of its recent range, and in the middle of a few key moving averages,” said Ferley. “I don’t think this will inspire the funds to do anything one way or the other,” he added.
The July contract dropped below nearby support, hitting a session low of $432 per tonne on Friday. However, the contract quickly bounced off of that low and finds itself back within the $440-$460 range it held for most of the past three months.
StatsCan’s acreage report on Thursday could provide some nearby direction if there are any surprises in the data. Farmers planted 20.3 million acres of canola in 2014, and industry estimates on the 2015 area range from about 19 to 21.5 million acres.
Ferley said the market likely wouldn’t be surprised one way or the other, especially as a number of market factors have seen some adjustment since the survey was conducted in late March and the results will be somewhat dated.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.