By Glen Hallick, MarketsFarm
WINNIPEG, Jan. 11 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were mostly higher at midday Monday, despite sharp declines in Chicago soyoil.
“Traders are selling soybeans and soyoil and buying canola spreads,” said a Winnipeg-based trader, noting that “canola was ridiculously cheap.”
Despite the sharp increases in canola futures over the last few months, the trader said the oilseed remained cheap compared to other edible oils. He estimated that it lagged about C$35 per tonne late last week and has regained about C$20 to C$25.
“Canola can’t stay cheap for very long. It’s somehow go to regain some of that lost ground,” stated the trader.
That will be very important as he stressed the demand for canola hasn’t been impeded by the sharp rise in prices.
With the United States Department of Agriculture (USDA) set to release its next supply and demand estimates, along with its grain stocks as of Dec. 1 report, the markets could become quite volatile.
He noted that any bullish news on soybean ending stocks could be countered by the large number of sale cancellation over the last seven weeks.
By midday the Canadian dollar fell from Friday’s close of 78.71 U.S. cents to 78.23.
Approximately 24,650 canola contracts were traded as of 10:40 CST.
Prices in Canadian dollars per metric tonne at 10:40 CST:
Canola Mar 671.30 up 6.10
May 657.00 up 3.50
Jul 643.20 up 3.30
Nov 545.20 unchanged