Despite bearish pressures, canola remains rangebound

Storms in some areas have built a weather premium into crop values

Canola on the ICE Futures exchange remained locked in a range during the week ended July 23.

Canola prices started the week at $485.30 per tonne and were on either side of steady throughout the week. The November contract closed July 23 at $485.40 per tonne.

By all accounts, canola prices held up to considerable pressure from a spike in the Canadian dollar and weakness in comparable vegetable oils.

The Canadian dollar hit a six-week high on July 23, closing at 73.54 U.S. cents. The dollar was said to be pushed higher by comparable weakness in the U.S. greenback, which is losing ground against various major currencies around the world.

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Despite consistent export activity, the Chicago soy complex was mostly lower during the week. Nearby soyoil contracts lost about a third of a cent at mid-week.

According to the weekly export sales report from the U.S. Department of Agriculture (USDA), during the week ended July 19, soyoil exports totalled 20,000 tonnes. That was in line with pre-report expectations.

Market participants will continue to keep a close eye on weather developments in coming weeks, as canola crops are about a month away from swathing in some regions of the Canadian Prairies.

Along with considerable precipitation in northern Alberta, there have been isolated instances of storms and excessive wetness in other areas, which have injected somewhat of a weather premium into prices.

About the author

Glacier MarketsFarm

Marlo Glass

Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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