CNS Canada — ICE Futures Canada canola advanced sharply on the week and has room to strengthen further, though resistance is on the horizon.
Canola far outpaced Chicago Board of Trade (CBOT) soybeans in the week ending Wednesday, as the market gathered independent strength.
Since last week, July canola advanced about $18 per tonne, closing near $512 on Wednesday.
“July canola is the one to watch now,” said Jamie Wilton, senior commodity futures specialist at RJ O’Brien and Associates Canada.
Resistance could kick in around $10 from current levels in July and November, he added.
Canola notched advances with losses in the Canadian dollar against its U.S. counterpart, and weather concerns in Western Canada.
A slew of recent wet weather — and forecasts for more — are hindering farmers’ ability to get into fields to harvest and prep for seeding.
Moving forward, traders are watching weather, cash markets and upcoming data from Statistics Canada.
“We have to go back up to entice the producer to let go of some sales,” Wilton said.
Statistics Canada is set to release its principal field crops seeding estimates data on Friday.
Early estimates collected by CNS Canada for canola’s seeded area range from 20.3 million to 22.5 million acres. That compares with 20.367 million acres in 2016.
“And [traders are] also waiting to see what the U.S. does with their biofuels investigation with Argentina and Indonesia,” Wilton said.
Last week the U.S. Commerce Department announced it would be conducting antidumping and countervailing duty investigations of those countries’ biodiesel exports to the U.S.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.