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ICE weekly outlook: Canola still watching soy, weather

CNS Canada — ICE Futures canola contracts moved off their nearby lows over the week ended Wednesday as persistent harvest delays provided support.

Additional strength, however, may be dependent on movement in the Chicago soybean market.

“Soybeans will be the driving force behind which way canola futures go,” said commodities investment advisor David Derwin of PI Financial in Winnipeg.

The ongoing trade dispute between the U.S. and China didn’t look like it would change anytime soon, keeping beans under pressure, he said.

While cool and wet Canadian conditions harvest conditions may be lending some nearby support for canola, he said the medium-term trend was still edging lower.

Derwin placed support in the November contract at around the $485 per tonne level, which was tested a number of times in recent months, and only about $10 below current values.

Harvest delays and yield uncertainty have limited farmer hedging this year, but Derwin was optimistic that producers would be doing their best to get their crops off the fields.

Unpriced canola will eventually come to market, which should also weigh on values. However, he added, producers should look at their own situations and profit margins when making decisions.

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

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