ICE weekly outlook: Benign weather weighs on canola

Reading Time: < 1 minute

Published: July 21, 2022

, ,

ICE November 2022 canola (candlesticks) with 20-, 50- and 100-day moving averages (yellow, green and black lines). (Barchart)

MarketsFarm — ICE Futures canola contracts were seeing choppy activity in mid-July but were under pressure overall, closing at their weakest levels in six months on Wednesday.

Relatively favourable Prairie weather, speculative long-liquidation, and pressure from outside markets all weighed on values with more losses likely if no weather concerns develop.

“The weather looks fairly decent across the Prairies,” said Jamie Wilton of RJ O’Brien in Winnipeg, accounting for the latest selling pressure in canola.

“I think it’s only a matter of time before we break lower,” said Wilton. Although he added that a turn to hot and dry weather could provide the catalyst for a move higher.

Read Also

Photo: Primeimages/Getty Images Plus

Fifty-six per cent chance of more stable, ENSO neutral weather conditions in late summer and fall U.S. forecasters say

More stable weather due to El Niño-Southern Oscillation (ENSO) neutral conditions are likely in the Northern Hemisphere summer of 2025, with a 56 per cent chance in August-October, the U.S. Climate Prediction Center said.

That said, any attempts at rallies have been failing recently.

While the November contract has held above the psychological $800 per tonne level for the time being, Wilton expected prices may need to break below that point to encourage demand again.

Fund traders are also still long and liquidating in the U.S. futures, with that selling pressure spilling into the canola market.

In addition to the weather, recession fears and activity in the currency markets were also having an influence on the oilseed markets, according to Wilton.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

About The Author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

explore

Stories from our other publications