ICE weekly outlook: Canola rangebound, watching harvest

CNS Canada — Canola futures moved steadily higher over the course of the week ended Wednesday, but remain firmly entrenched in a sideways trading range as seasonal harvest pressure continues to limit the upside.

“Most of the markets are still just killing time… everybody is just monitoring things to see where they go next,” said Ken Ball of PI Financial in Winnipeg.

Something will shift eventually, he said, but for the time being the uncertainty of U.S. soybean production was keeping some caution in the oilseeds.

While canola is stuck in a longer-term sideways range, the nearby trend has turned a bit higher as the market finds some support from cool and wet weather in Alberta.

“It’s still a little early to get too worried, but obviously this nasty weather has to go and they’ll need to get a good stretch of reasonable weather,” said Ball, adding that the majority of canola in central Alberta is still standing.

“They need another month of decent weather to get the job done.”

However, harvest operations are more advanced elsewhere, and canola yields were looking reasonably good overall.

Using a model-based approach, Statistics Canada pegged canola production at a record 19.7 million tonnes, and many industry participants are of the opinion that the actual crop could yet top 20 million.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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