CNS Canada –– ICE Futures Canada canola contracts stayed mostly rangebound during the week ended Wednesday, before finishing $4 per tonne higher.
“Funds are putting a long position on,” said Wayne Palmer of Agri-Trend Marketing in Winnipeg.
The most-frequently-traded July contract tested the $460 per tonne mark before backing off at the end of the five-day period to settle at $458.50. However, Palmer said, a rally could still happen.
“Over $461 (per tonne) you will see more fund buying. I think you will see that this week.”
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One potential stumbling block to that scenario, though, can be found in U.S. soybeans, he said.
“Soybeans don’t want to rally; (crop conditions) look good for them in the U.S.”
Cold temperatures over the weekend in Saskatchewan and Manitoba were supportive, said Palmer. Temperatures of -5 to -7 C were recorded in certain areas and as a result, some reseeding may have to be done.
“Always interesting times when you’re reseeding. Too much moisture, all of a sudden you can’t get on the field,” he said.
With these variables in play, Palmer said there is more potential to rally the market than to take it much lower than it is right now.
The Canadian dollar is also moving the market, said Palmer, noting the currency had seen wild swings over the past week.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
