ICE weekly outlook: Steady canola awaits acreage data

CNS Canada — ICE Futures Canada canola contracts fell to their lowest levels in six months during the week ended Wednesday, but uncovered support to the downside and may be entering a period of consolidation.

“On canola, we’re seeing a stabilization period after a sharp downward move,” said Jerry Klassen, manager of Canadian operations with Swiss-based GAP S.A. Grains and Produits in Winnipeg.

He expected to see canola hold within a sideways trading range, “until we get the StatsCan acreage report out of the way.”

Statistics Canada releases its first survey-based acreage estimates of the year on April 21. Early trade guesses place canola acres between about 20 million and 22 million, which would compare with the 20.4 million acres seeded to the crop in 2016.

“We have very favourable conditions across Western Canada going into spring seeding,” said Klassen.

“The markets are usually stable or firm, until we get confirmation that the crop is in and on the way.”

Export demand appears quiet for the time being, he added, while commercial stocks are adequate, which should keep values rangebound.

Activity in Chicago Board of Trade soybeans and soyoil could also provide some direction for canola, said Klassen.

From a chart standpoint, the May canola contract hit a six-month low of $473.70 on Monday. On the other side, the psychological $500 per tonne level marks a nearby upside target.

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

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