ICE weekly outlook: Canola still pressured by soybeans, rangebound

MarketsFarm — The trench in which ICE Futures January canola now finds itself is expected to hold firm, according to Ken Ball of PI Financial in Winnipeg.

“We’re developing a range for the January contract that might hold up for a while, around $455-$467 roughly,” he said.

“We could kick up and down in that range for a few weeks without really going anywhere.”

News that Canadian National Railway (CN) workers will return to work at midweek after seven days of striking was thought to be supportive of canola markets.

“It took away a bit of pressure for canola,” said Ball.

Large 2018-19 carryout stocks for canola have mitigated market concerns that were sparked by a portion of the canola crop staying in the field over winter.

“Because our carryout from last year was so large, it’s not having a very big impact right now,” he explained.

Soybeans have remained “the weak element of the oilseed group,” further pressuring canola values. However, soybean prices could rally if growing conditions in South America remain dry.

“They’re in fair shape now, but we could be looking at weather issues coming up over the next couple of weeks,” he said.

U.S. soybean prices have been competitive with Brazilian exports, which have been bolstered by a weak local currency.

— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.