CNS Canada — ICE Futures Canada canola futures advanced on the week and are likely to keep near-term support, one analyst says, as traders mull over the question: Just how much canola is out there?
“There’s still a lot of uncertainty about canola numbers; we’re still not certain about how big the last crop was; we’re still not certain how much of the canola that was left out in the fields got harvested,” said Ken Ball of PI Financial Corp. in Winnipeg.
Traders also aren’t certain about how many acres of the oilseed to expect, due to variable planting conditions in Western Canada, he added.
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Chicago soybean futures came under pressure on Thursday on a lack of Chinese demand for the U.S. oilseed while corn futures ticked higher on strong export sales data, analysts said.
That uncertainty is likely to keep canola well supported in the near term, but further into the growing season the market could get choppy, especially if there are production-related issues.
“As long as the weather is reasonably co-operative, usually you hit the end of June, beginning of July, and you go ‘Holy smokes, there’s the crop, look at that,’ and that can tend to snag the markets a little bit,” Ball added.
Canola will also be tracking movement in Chicago Board of Trade oilseed markets.
The U.S. soybean crop looks to be in good shape, Ball said, but noted Canadian and U.S. oilseed crops could use rain, and investors will be watching for showers.
Since last week, canola advanced close to $9 per tonne in the July contract, closing at $509.50 on Wednesday.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
