Winnipeg (MarketsFarm) – ICE canola futures held within a narrow range during the week ended Nov. 13, as the market waits for fresh news to push it one way or the other.
“There are certainly some supportive elements underneath the marketplace,” said Mike Jubinville of MarketsFarm Pro, pointing to an upward trend in world vegetable oil prices and solid demand for canola oil.
“The demand elements on the canola market are good, but that demand is there only as long as canola is cheap,” he added, noting that “canola is economically priced from an end users perspective.”
On the other side, Canada’s ongoing diplomatic dispute with China may be limiting some seed sales to the country, but Jubinville noted that other countries were processing more Canadian canola and sending the oil to China. Canada was also shipping more canola oil itself.
With an estimated 10 percent of Canada’s canola crop still unharvested there are questions over how much there will be to market. However, Jubinville noted that the country won’t be running out of canola, with a sizeable carryout of over three million tonnes still generally expected.
“Even though demand is strong, the uncertainties of the future limit the ability of the market to rally,” said Jubinville. Until something changes, he expected canola would remain in a sideways trading pattern. The January contract settled at C$461.80 per tonne on Nov. 13, which was right in the middle of its well established trading range between C$450 and C$475 per tonne.
With little on the horizon to push values out of that range, Jubinville recommend producers look for short term pops in the futures, deferred delivery options and local basis opportunities.