ICE Futures Canada canola contracts have seen some wide price swings over the past week, but are relatively unchanged from where they were only five trading days earlier, with small losses in the two front months and a firmer tone in the more deferred positions.
Choppy, range-bound activity is expected to persist in the canola market going forward, according to an analyst.
With the canola harvest finished across Western Canada and the smaller production already priced into the market, there’s no strong case for a sharp move in either direction, said Errol Anderson of ProMarket Communications in Calgary.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Unless there is some fresh fundamental news, Anderson said canola would likely follow the U.S. soy complex and trade within a range of $580 to $620 per tonne.
In addition to spillover from soybeans, the canola market will also take some direction from the South American weather situation and activity in Malaysian palm oil, said Anderson.
The soybean growing regions of South America received some beneficial moisture recently, which should limit the upside potential in the oilseed markets.
"The bulls don’t have any ammo right now, but the bears don’t either," said Anderson.
Farmer selling is not very aggressive, with most producers now waiting until the New Year before making their next move, he added.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
