CNS Canada – ICE Futures Canada canola contracts may be showing some strength to start the New Year, but the overall trend remains sideways, according to an analyst.
“Everything is hovering around C$500, which has been a magnet for the past year-and-a-half,” said David Derwin, Commodities Investment Advisor with PI Financial.
The most active March contract touched a nearby low of C$485.00 per tonne on the last trading day of 2017 (Dec. 29), but was back at C$494.60 by Jan. 3, 2018.
While there have been some large moves, “sideways has certainly been the trend,” said Derwin, adding that the sideways pattern could see values move C$25 to C$30 per tonne in either direction.
Read Also
U.S. grains: Soy futures top one-week high, US crop outlook limits gains
Chicago Board of Trade soybean futures hit their highest level in more than a week on Thursday as technical buying helped the market recover from a three-month low reached on Monday, analysts said.
“The markets can tend to be fairly boring for a long time, and then all of a sudden they’re not boring in an instant,” said Derwin.
Outside factors that could sway which way canola values go from here include the Canadian dollar and movement in Chicago Board of Trade soybeans. Soybeans are also trading in a relatively sideways pattern, with nearby attention on weather patterns in South America and a number of upcoming USDA reports out on Jan. 12.
Derwin said the possibility of increased Canadian canola acres this spring was a bearish influence in the background, as issues facing peas and a lack of excitement in wheat could all lead to more canola plantings.
