The ICE Futures canola market bounced around within a sideways range during the last full trading week of October, with the futures hard-pressed to break one way or the other.
The nearby November contract climbed sharply higher at one point, but volumes were thin in the front month as open interest dwindled and lack of liquidity exaggerated price moves.
The more active January contract held within the $20 per tonne sideways range it’s been stuck in for nearly a month, between$860 and $880 per tonne. Wide crush margins continue to suggest prices have room to break higher, but that has yet to happen, and the margins could just as easily come down if product values weaken.
Read Also
Manitoba sees cabbage seed pod weevil surge
Cabbage seed pod weevil has crossed into true canola pest territory in Manitoba this year, following years of minimal population counts
Chicago Board of Trade soy oil ran into profit-taking on Oct. 27, but before that correction it had been in a steady uptrend for the past month, trading at its strongest levels since June. Meanwhile, soybeans themselves were holding relatively steady, with strong export demand on one hand countered by seasonal harvest pressure on the other.
The United States soybean harvest is nearing its final stages, causing market attention to shift to the Southern Hemisphere, where Brazil and Argentina are starting to seed their next crops. In Brazil, early expectations are for large soybean production, but excessive moisture in some areas has caused planting delays and could be something to watch if some land ends up unseeded.
Argentina’s soybean seeding usually doesn’t get underway in a big way until November, but much of the country is still dealing with drought conditions and the dryness there could also limit yields.
That dryness was making headlines in the wheat market during the week, as Argentina’s wheat crop is typically harvested in November and December. The Rosario Grain Exchange lowered its estimate for the country’s wheat crop to 13.7 million tonnes, which would be well off last year’s record 23-million-tonne crop. The U.S. Department of Agriculture’s attaché in the country dropped the forecast to 15.5 million tonnes from an earlier projection of 17.5 million. Exports should be down accordingly, which opens the door for more North American exports.
The ongoing situation in Ukraine was also being followed closely by grain traders. Shifting sentiment on Black Sea movement led to choppiness in the North American wheat market.
The deal that now allows safe passage of grain vessels through the Black Sea is set to expire later in November, and messages have been mixed on whether it will be extended.
