CNS Canada — Canola cash prices notched gains with recent news out of the U.S., but the market remains rangebound, and near-term support is likely to run dry.
Canola cash prices were supported by a two-day rally in the futures, said Mike Jubinville of ProFarmer Canada, but crushers have widened out the basis for nearby deliverable positions in the spot market.
“So, they didn’t want it here and now, because we have enough canola for that,” he said.
While buyers moved to discourage near-term farmer-selling in the spot market, delivery from May to July offers better basis opportunities.
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The Middle East war is not the only thing affecting canola futures on the Intercontinental Exchange, said Tony Tryhuk, director of futures trading for RBC Dominion Securities in Winnipeg.
ICE Futures Canada canola rallied more than $18 on Tuesday and Wednesday as the U.S.-based Renewable Fuels Association said President Donald Trump would be issuing an executive order to change the national biofuels program and shift the point of obligation.
However, a White House representative denied those claims.
“I consider it an anomaly,” Jubinville said. While he doesn’t consider that support to be long-lasting, he doesn’t dismiss the possibility of it happening either.
“It’s the Trump administration. They may sign an executive order tomorrow and off to the races we go.”
Looking at the bigger picture, Jubinville said the short-term rally is just another part of the market’s ebb and flow, and in general, oilseed markets are locked in a broad sideways trend.
“That’s just the environment we’re in right now, until the next fundamental catalyst comes along to change that.”
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
