MarketsFarm — ICE Futures canola contracts drifted lower during the week ended Wednesday, although values remained rangebound overall.
“The market is maybe coming to the realization that we still have near-record South American (soybean) supplies on hand,” Ken Ball of PI Financial in Winnipeg said of the downtrend.
While Argentina has suffered crop losses from drought, he said increased Brazilian production prospects have more than made up for any shortfalls.
“There’s a muddled mixture of stuff in the markets,” Ball said, noting that in addition to South American production uncertainty, ongoing tensions in Ukraine were supporting grains and oilseeds in general.
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The production concerns in Argentina have been especially supportive for soymeal, and Ball saw the meal market as being vulnerable to a correction. If meal peaks, it could weigh on soybeans and in turn canola.
Argentina is already importing Brazilian soybeans to keep their domestic processors operating. Brazilian soybeans are also working their way to China, with U.S. export projections for sales to China already filled for the year.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
