ICE weekly outlook: Farmers advised to price some new crop

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Published: February 6, 2019

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ICE November 2019 canola with 20- and 100-day moving averages. (Barchart)

ICE Futures canola contracts held within a narrow trading range during the week ended Wednesday, as participants await fresh market-moving news.

While the sideways trading range could persist in the near term, an analyst said new-crop futures were at decent levels and encouraged farmers to do some forward pricing.

The November canola contract settled Wednesday at $498.10 per tonne, while January traded at $502.30.

While average basis levels for new-crop canola of $35-$40 per tonne below the futures are not that great, “we don’t want to see this $500 level disappear on us,” said commodity investments advisor David Derwin of PI Financial.

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Derwin recommended growers price some of the 2019-20 crop now, and worry about the basis later.

Old-crop basis levels are a bit more favourable, but they’re still wider than farmers would like to see. Derwin said $11 per bushel ($485 per tonne) was a cash target many growers were likely looking at.

However, current basis levels in the $15-$20 per tonne range below the futures work out to cash bids of $10.50-$10.65 per bushel.

The U.S. Department of Agriculture releases a number of supply/demand reports on Friday. Any surprises in those reports, and resulting moves in soybeans, could provide some nearby direction for the canola market.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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.

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