MarketsFarm – There’s the possibility of the nearby January canola contract reaching upwards to C$1,000 per tonne, according Winnipeg-based analyst Wayne Palmer of Exceed Grain.
“I think you got canola somewhere in the winter months maybe trading close to $1,000 again in January,” he said.
Palmer placed his suggestion on the sharp upticks that soyoil has made over the last month at the Chicago Board of Trade (CBOT). He said spillover from soyoil will underpin canola’s rise during winter, along with support from other vegetable oils.
Read Also
U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
“I don’t see oil prices going down anytime in the near future,” Palmer said.
He also noted there has been little in the way of farmer selling of canola lately.
“Farmers are sort of cash adequate at this time,” Palmer said.
While canola prices on Nov. 2 were caught up in the general sell-off in the grain markets that morning, the analyst said the strength in oilseeds allowed canola and other veg oils to recover and climb higher.
That sell-off was generated by Russia’s announcement on Nov. 2 it would re-enter the Black Sea export agreement. On Oct. 30, Russia stated it was pulling out of the deal, when it accused Ukraine of launching drone strikes on the Russian Black Sea fleet based at Sevastopol. Ukraine denied it had anything to do with the attack.
With mediation by Turkey and the United Nations, Russia said it would rejoin the agreement provided Ukraine made assurances that it would not use the safe corridors for vessels to launch any future military attacks.
