ICE Futures canola contracts fell to their lowest levels in 15 months during the week ended Nov. 21, but found some support to the downside as traders reacted to activity in the Canadian dollar and Chicago soyoil.
“Canola seems to be getting some short covering after a long break (lower),” said Ken Ball, of PI Financial in Winnipeg. However, he added that canola won’t do much on its own, but rather needs to find direction from outside markets.
Some of that direction could come from the upcoming G20 meetings in Argentina Nov. 30 to Dec. 1, where the United States and China are expected to talk about trade. However, even if a deal is struck to end the trade war between the two countries, Ball cautioned that U.S. soybeans were unlikely to get back their entire market share.
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While there are some ideas that the lows may be in for the time being in canola, Ball also said he “still wouldn’t be surprised if canola went to C$450.”
The January contract settled well above that level at C$479 per tonne on Nov. 21, but Ball said even C$450 was looking relatively high compared to other oilseeds.
Statistics Canada will release its updated production numbers on Dec. 6, which traders will also be watching when they’re released.
