ICE Futures canola made significant gains during the week ended Nov. 5, after starting the week in the red.
Canola prices started the week at $534.90 per tonne, with the January contract losing over $7 per tonne. However, unseasonably balmy weather and support from comparable vegetable oils gave prices a much-needed boost throughout the week, and the January contract closed at $550.40 per tonne on Nov. 5.
Temperatures across the Prairies hit seasonal highs during the week, causing producers to turn their attention away from selling canola, toward preparing for next year’s growing season. However, when prices began to rise, selling interest followed suit, which is expected to cap further gains on canola in the days to come.
Canola prices were influenced by Chicago soyoil and other world oilseeds, as demand has given nearby contracts a considerable boost. On Thursday morning, the U.S. Department of Agriculture (USDA) reported India had purchased 33,000 tonnes of U.S. soyoil. This uncharacteristic purchase suggests widespread global interest for soyoil as countries continue to stock their proverbial pantries during the COVID-19 pandemic.
Prolonged dryness in key soybean-growing regions of South America has also aided the U.S. soybean market, as did record exports during September. Official export data confirmed soybean shipments set a new record for the month of September, with 7.78 million tonnes shipped. That was boosted by record-setting shipments to China, which totalled 5.07 million tonnes or 65 per cent of the total.
The Canadian dollar gained strength throughout the week, capping further gains for canola. The loonie closed at 76.6 U.S. cents on Thursday. The Canadian currency was stronger due to a dip in the U.S. Dollar Index.
Financial markets have also been haunted by the prolonged U.S. presidential election. Ballots were still being counted days after Americans went to the polls, with key battleground states including Pennsylvania, Nevada, North Carolina and Georgia a toss up.