MarketsFarm — ICE canola futures held rangebound during the week ended Wednesday, with uncertainty over new-crop production likely to keep some caution in the market over the next few weeks.
“Canola is very attractively priced right now,” said Ken Ball of PI Financial in Winnipeg, noting crush margins have improved significantly in recent weeks to hit some of their best levels of the past year.
The canola crush margin index as compiled by ICE Futures showed margins as of Wednesday at about $90 above the November futures, up by about $10 over the past month and well above the $38-per-tonne margins seen at the same point the previous year.
“From a buyer’s point of view, it’s fairly attractively priced,” said Ball.
New-crop production estimates are quietly edging higher heading into the harvest, with many areas that weren’t looking good a month ago now expecting to see fairly decent crops, said Ball.
However, “there’s still a lot of canola that could be vulnerable,” said Ball, noting Alberta in particular will need to stay frost-free until the middle of September.
“Everybody will be watching the weather forecast pretty closely.”
— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.