CNS Canada — ICE Futures Canada canola futures moved slightly higher during the week ended Wednesday, as values stayed mostly rangebound amid a dearth of fresh fundamental news.
“The open interest is going down because the funds have been liquidating their positions; down under 10,000 contracts,” said analyst Wayne Palmer of Agri-Trend Marketing in Winnipeg,. Just six weeks ago, he said, interest was closer to 40,000 contracts.
From a chart perspective, the nearby May contract has generally hung around the $455 a tonne mark for the past seven days.
Palmer said everyone is waiting for Statistics Canada’s seeding intentions report, due out next week, before making any sudden moves.
“Most people have their positions on fundamentally. I don’t think you have much of a spec element here, and why would you, going into a major report?”
Canola continues to track the U.S. soy complex up and down but is limited by the Canadian dollar.
Producers are hanging onto their supplies right now and waiting for better fundamentals, Palmer said.
A producer, he said, is “not looking at selling any old crop. He’s going to keep it there until the crop comes up. He’s not going to sell any new crop unless the prices go higher.”
Investors should have price points picked out, he said, in case some type of weather event comes along between now and the release of the report.
“If we get any kind of a weather scare, you’ll see canola jump $50.”
In Vancouver, he said, cash premiums have drifted lower due to inactivity between buyers and sellers. Buyers in China and Japan seem to be covered right now for canola supplies.
“It’s a wait-and-see, until the report.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.