Glacier FarmMedia – At mid-March one broker said he expects canola prices on the Intercontinental Exchange to make their way lower for the balance of the month.
“Until we get a big driver in place that gets the market really nervous and worried,” Ken Ball of PI Financial in Winnipeg said canola will pull back.
He suggested the dryness across the Canadian Prairies could become a major issue if there’s insufficient moisture by seeding time.
After a stretch of declines, Ball said ICE canola futures received support from seasonal rebounds and from some short covering. However that rally hit pause on Mar. 13 due to an increase in farmer selling. Cash prices for canola on Mar. 12 hit C$14 per bushel.
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“We are hearing reports of growers selling canola in droves,” Ball said, noting they hung onto it for most of the winter and were now eager to sell it ahead of spring planting.
“This is really a golden opportunity to do it,” Ball advised.
On the downside of the equation, he noted that canola exports remained in the doldrums. The Canadian Grain Commission reported that as of Week 31 of the 2023/24 marketing year those exports were 3.44 million tonnes, while the same time the previous year they were 5.31 million.
“Canola exports unfortunately are getting worse and worse,” Ball said.
During the past week there were unconfirmed reports of China having purchased upwards to 600,000 tonnes of Canadian canola. He cautioned there was similar scuttlebutt of China buying 400,000 tonnes of canola in December, and another rumour for 300,000 tonnes in January – but nothing has yet to show up in the CGC’s monthly report.
Ball pointed out that doesn’t necessary mean China had not made any of those purchases, rather it could be those amounts of canola had yet to be shipped out of Canada.
“The price of canola has become more attractive, so it would be logical to expect some uptick in exports finally at these levels. Especially with [Malaysian] palm oil getting more expensive,” he said.
— Glen Hallick reports for MarketsFarm from Winnipeg.
