ICE weekly outlook: Canola rangebound, awaits report

New StatsCan data due out Monday

ICE November 2021 canola (candlesticks) with Bollinger bands (20,2). (Barchart)

MarketsFarm — ICE Futures canola contracts saw some choppy activity during the week ended Wednesday, hitting their lowest levels in nearly a month before recovering back toward the upper end of their wide sideways range.

A new production report from Statistics Canada, due out Monday (Aug. 30), could set the stage for a break one way or the other, with the nearby market focus on harvest conditions.

Drought conditions through the growing season cut into yields, with pre-report expectations calling for canola production well below the 18.7 million tonnes grown in 2020.

However, with industry estimates coming in anywhere from 11.5 million to 16 million tonnes, any surprises in the data have the potential to spark a move in the futures.

“Guys are holding their cards tight,” said a Winnipeg-based trader, adding he was hearing mixed reports from clients of great yields in some spots that got moisture — but even worse-than-expected yields in others.

As a result, putting a number on the size of the crop would be difficult until the harvest is complete.

From a chart standpoint, the November contract finds itself in a range between $850 and $940 per tonne.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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