ICE weekly outlook: Canola steady at midweek

ICE January 2021 canola with 20-, 50- and 100-day moving averages. (Barchart)

MarketsFarm — Canola contracts at ICE Futures showed strength earlier in the week, due to comparable strength in Chicago soyoil.

“Bean oil is keeping it firm,” said Ken Ball of P.I. Financial in Winnipeg — but canola was still lagging behind.

“It won’t go up as much as United States markets.”

Soybean oil started to falter at midweek, spending most of Wednesday trading in the red before nearby contract closed up by one-10th of a cent, at 31.67 U.S. cents/lb.

Similarly, canola held firm Wednesday but couldn’t shake soybeans’ influence. The November canola contract was down by 10 cents at $487.80 per tonne, and the January contract closed up 20 cents at $495 per tonne.

The Canadian dollar has had a bearish influence on canola, keeping a lid on further gains. The dollar has been around 76 U.S. cents for most of the week, making canola exports less attractive globally.

With the canola harvest a few weeks out in most regions of the Canadian Prairies, some market participants believe the hot weather is injecting a weather premium into prices. There is some rain forecast to fall in the eastern Prairies later this week.

— Marlo Glass reports for MarketsFarm from Winnipeg.

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