MarketsFarm — ICE Futures canola contracts hit their strongest levels in three months during the first week of July, but appear to be running into resistance from a chart standpoint.

The November contract hit an intersession high of $482 per tonne on Wednesday, but settled below the $480 mark.

“You can’t discount at least the potential of this time being the breakout time, but for right now it (resistance) continues to hold,” MarketsFarm Pro analyst Mike Jubinville said.

Gradual strength in outside vegetable oil markets, including European rapeseed futures and Chicago Board of Trade soyoil, were supportive influences, and Jubinville said it would take continued gains in those outside markets to keep canola pointed higher.

Weather conditions in the United States and their influence on the CBOT soy complex will likely be a major driver over the next few weeks, with Canadian weather also being followed closely.

Excess precipitation may lead to issues with slow development and possible disease issues in parts of Western Canada. However, Jubinville said it was too early to cut yield estimates.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.