By Glen Hallick, MarketsFarm
WINNIPEG, Dec. 21 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts were higher at midday Monday, having busted through the psychological barrier of C$620 per tonne earlier in the session.
A Winnipeg-based trader explained that much of the ‘weather market’ upward push is due to dry conditions in South America.
“The focus seems to be the weather in Argentina. Brazil looks like they’re getting a fair amount of rain over the next couple of weeks,” he said.
There is a possibility for significant losses in the coming soybean crop in Argentina, but the trader noted it’s still very early in the crop’s development.
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Given the current price levels for canola, he added it’s very likely there will be profit-taking in the market this week. That he said, should make for volatile trading.
At midday the Canadian dollar was at 77.84 U.S. cents, compared to Friday’s close of 78.28.
There have been ongoing concerns in the market about tightening supplies of canola resulting in price rationing.
Agriculture and Agri-Food Canada issued its latest supply and demand report on late Friday afternoon, calling for 2020/21 ending stocks to plummet from about 3.1 million tonnes the previous year to 1.2 million.
Approximately 20,600 canola contracts were traded as of 10:50 CST.
Prices in Canadian dollars per metric tonne at 10:50 CST:
Price Change
Canola Jan 632.70 up 8.90
Mar 625.50 up 8.10
May 611.30 up 7.40
Jul 595.50 up 6.20
