Glacier FarmMedia — Canola futures trended higher during the week ended Oct. 15, with the November contract settling above its 20-day moving average for the first time in nearly a month. Optimism over thawing trade relations with China contributed to the gains, although the lack of any concrete movement to end the stiff tariffs on Canadian canola seed or oil tempered the advances.
“We should be near the bottom … and hopefully we’ll see some bounce in the market,” said analyst Lawrence Klusa of Seges Marketing in Winnipeg.
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From a chart standpoint, November canola was finding support at C$600 per tonne, which Klusa described as “the natural resting point at this time.”
However, he added that canola was unlikely “to go to far in either direction,” with little upside potential without a resolution to the trade dispute with China or the development of any weather concerns for soybeans in South America.
Canadian canola exports are running behind the year-ago level, due primarily to the absence of Chinese buying, but Klusa expected the low prices and relatively tight global supply/demand balance sheet for oilseeds would eventually see canola move to other destinations.
However, while the resulting carryout may not see much change on the year, that also doesn’t necessarily mean higher prices.
