Glacier FarmMedia | MarketsFarm — The ICE Futures canola market backed away from nearby highs during the week ended Oct. 16, as losses in Chicago soybeans and soyoil weighed on values. With the canola harvest in its final stages across Western Canada, the market will likely settle in a sideways range while looking to outside influences for direction.
“Canola doesn’t have a canola problem — the fundamentals haven’t changed — canola has a soybean problem,” said MarketsFarm analyst Mike Jubinville on the recent losses in canola. He said the advancing soybean harvest in the United States and improving Brazilian crop prospects were behind selling pressure in soybeans that was spilling into the canola market.
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Prices for the soy complex, and corn pushed lower for the most part during the week ended Aug. 27. Terry Reilly, senior agricultural specialist for Marex, said there were a few factors behind the declines, which he expects the losses to continue.
Canola “just has to get out from under the bean market,” added Jubinville.
Canola remains attractively priced compared to other oilseeds, especially European rapeseed, which should be bringing in some buying interest, according to Jubinville.
From a chart standpoint, the nearby November contract dropped below the psychological C$600 per tonne mark during the week, with that level turning to nearby resistance. The next support comes in at the 50-day moving average around C$591 per tonne. On the other side, if the contract manages to move back above C$600 per tonne, the 100-day moving average at C$615 per tonne would be the next upside target.
