ICE weekly outlook: Canola under pressure at midweek

ICE November 2020 canola (candlesticks) with 20-day moving average (yellow line) and CBOT August 2020 soyoil (green line). (Barchart)

MarketsFarm — Canola contracts have received considerable pressure from outside sources, but held above $480 per tonne this week.

Ken Ball of P.I. Financial in Winnipeg expected canola to be down by $6-$10, but nearby contracts closed lower by about a dollar at $483.60 per tonne.

Ball referred to weakness in Chicago soyoil, along with strength in the Canadian dollar, as the negative forces behind canola prices.

Chicago soyoil was lower by over a 10th of a cent at midweek, while the Canadian dollar remained above 74 U.S. cents for the second consecutive day.

“There’s pressure on canola, and with bean oil down it will likely get forced down lower,” said Ball.

Farmer selling activity also kept pressure on canola prices. According to the Canadian Grain Commission, during the week ended July 12, producer deliveries for canola jumped by 39 per cent from the week prior.

Early indications show the canola crop is in good conditions, with reports showing the crop is 74 per cent good to excellent condition. Market participants will continue to monitor weather developments and rain levels closely.

— Marlo Glass reports for MarketsFarm from Winnipeg.

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