CNS Canada — ICE Futures Canada canola futures drifted lower during the week ended Wednesday, chopping up and down amid volatile financial markets.
“A lot of canola has to come to market, and there’s a lot of guys that are cash-poor and they don’t have storage, so they have to sell it,” said Wayne Palmer of Agri-Trend Marketing in Winnipeg.
The Chinese stock market suffered large losses again, just days after the infamous “Black Monday” meltdown of Aug. 24. The bearish sentiment spilled over to North American markets and played havoc with crude oil which fell lower before rallying slightly.
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From a technical standpoint, the most-active ICE November canola contract ended $3.90 lower for the week. It also briefly touched the $461 mark, which was barely higher than the 200-day moving average of $460.30. Spread volumes were moderate while speculative selling continued to leak into the market, participants said.
Crush margins are also said to be slowly improving, while the advancing harvest could be throwing some hedge pressure into the equation as well.
Palmer said he believes many farmers and stakeholders have been surprised by the yields they’re getting, after a summer full of unpredictable rains and dry stretches.
“We had a crazy year of weather but people are still getting better yields than they expected. There’s no farmer selling yet, that’s why I think we have a way to go on the downside,” he said.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
