MarketsFarm — The ICE Futures canola market climbed to fresh contract highs once again during the week ended Wednesday, although profit-taking at those highs did slow the advances.
While additional corrections are possible, both the underlying fundamentals and technical remain supportive.
“This is the bull market of all time in canola,” said analyst Mike Jubinville of MarketsFarm Pro.
While both domestic crush and export movement are down on the year, “unless there is more canola out there that we don’t know about we have not created the recipe of demand destruction yet,” according to Jubinville.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
While canola may be trading at record-high levels, the oilseed is still competitively priced, he added.
“Right now, the trend remains our friend,” said Jubinville, noting prices would have to retest their 20-day moving averages before even beginning to think that the top may be in.
The old-crop July contract settled Wednesday at $1,144.80 per tonne, which would be $17 above its 20-day moving average. Meanwhile, the new-crop November contract, at $1,048.70 per tonne, was about $50 above its 20-day moving average.
“There’s nothing to say ‘This is the top’ yet,” Jubinville said, adding that canola typically sees strength from a seasonal standpoint at this time of year as well.
Upcoming acreage estimates from Statistics Canada on Tuesday could provide some nearby direction. While current prices should incentivize planting canola, prices for most other crops are also strong and Jubinville expected canola area may be reaching its limit.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
