ICE weekly outlook: Weather to spark ‘tug-of-war’ in canola

CNS Canada — ICE Futures Canada canola traders are keenly watching Prairie weather, with variability expected to keep the market choppy in the near term, one analyst says.

“There’s a little tug-of-war, back and forth; traders watch as every cloud goes across the Prairies,” said Keith Ferley, commodity futures advisor at RBC Dominion Securities in Winnipeg.

The short-term market focus is on seeding, he added, as crops still need to come off fields in Alberta and Saskatchewan.

Rain continues to hamper progress in those areas, which kept the market supported on the week.

Producers are “still trying to fight to get last year’s crop off,” Ferley said, while the season is moving closer to a period where it’s critical for crops to be seeded.

Short-term forecasts look favourable for seeding, with minimal rain, Ferley said, which could pressure the market to the downside.

“And guys that are not in the extreme moisture camps are going to be hammering as much crop as they can, so that’s a little on the negative side,” he said.

Since last week, canola advanced close to $8 per tonne in the July contract, closing at $527.70 a tonne on Wednesday.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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