MarketsFarm — Nearby ICE Futures canola contracts climbed to fresh highs during the week ended Wednesday, while= deferred months moved lower.
The new-crop November 2022 contract had overshot to the upside and was due for a correction, said Keith Ferley of RBC Dominion Securities in Winnipeg.
Any weakness would likely be met by commercial buying, he added.
“New-crop canola was way overvalued, and is attracting some selling,” Ken Ball of PI Financial in Winnipeg added.
As far as the more actively traded old-crop contracts are concerned, both traders said the underlying fundamentals remain strong.
Read Also
U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
However, the tight supply situation has been priced into the futures for some time and canola may be in need of fresh news as it looks overvalued compared to other oilseeds.
“Things have been choppy and erratic the past few weeks,” Ball said, adding that “the oilseeds have shifted into neutral.”
With attention turning to South American production, any weather issues with the soybean crop there could dictate some price movement in canola, said Ball.
Movement in the energy markets will also be followed closely, Ferley added.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
