CNS Canada — ICE Futures Canada canola contracts continue to chop around within a fairly tight range, but that could all change in the next few days as stocks data for North American oilseeds are due to be released.
The U.S. Department of Agriculture is set to release its May supply and demand report on Thursday, along with the U.S. crop production report. That will be followed on Friday by Statistics Canada’s stocks data.
While some early estimates from analysts south of the border indicate ending stocks of old-crop soybeans in the U.S. will fall slightly, the prognosis is a little different up here.
“Traders are generally thinking our stocks will be a lot higher than last year — almost 1.5 million tonnes higher,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
Tweaks to global stocks numbers could also dictate direction for canola, he added.
On the charts, the front-month July contract has been locked between the $525 and $530 marks since the end of April. The November contract has been chopping around in its recently-established range for the past couple of weeks.
“The last two weeks (November canola has) just been bouncing around in a $7 range,” said Ferley. “That may continue for a little bit longer while we wait for direction from these other markets.”
For now, funds remain long in the market. Farmers are generally too busy to sell these days, which is lending strength to canola prices. Conditions in parts of Alberta are still too wet, which is keeping a few farmers off the field. Multiple areas of Saskatchewan and Manitoba are lacking subsoil moisture.
A rally in crude oil is also a factor to watch, according to Ferley, as it pushes the Canadian dollar higher, making canola less attractive to buyers in foreign countries.
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.