ICE weekly outlook: Canola market floating headline to headline

MarketsFarm — The ICE Futures canola market moved lower during the week ended Wednesday, but activity was choppy as futures reacted to broad swings in global financial markets.

While the looming growing season should be starting to garner some attention, the COVID-19 pandemic “has grabbed all of the headlines and all of the oxygen out of the air,” said analyst Mike Jubinville of MarketsFarm Pro.

“We seem to be just floating along from headline to headline,” he added, noting the canola market was now trying to get a better handle on what the pandemic will mean for demand down the road.

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While production is not likely to see much of an impact from the virus and consumers will continue to eat, Jubinville said any number of logistical issues could disrupt the markets.

An uncertain timeline of longer-term measures to deal with COVID-19 will add to the general air of cautiousness in the markets.

Beyond the pandemic, seasonal price trends would suggest some uptrend in canola between now and June, Jubinville said.

Cold and wet conditions across parts of the Prairies could lead to some issues with spring seeding, he added.

However, a million tonnes or more of the 2019 crop are still waiting to be harvested this spring. Jubinville expected increased deliveries of spring-harvested canola would likely be reflected more in local basis levels rather than in futures.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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