ICE weekly outlook: Canola futures still well supported

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Published: December 8, 2021

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ICE March 2022 canola (candlesticks) with Bollinger bands (20,2). (Barchart)

MarketsFarm — The ICE Futures canola market was showing signs of running into resistance to the upside during the week ended Wednesday, as speculators booked profits on some of their large long positions.

The general uptrend, however, remains intact despite the minor correction.

While bouts of consolidation were not unexpected, “the trends are still upward and pointing higher,” said David Derwin, commodities investment advisor with PI Financial in Winnipeg.

“One thousand dollars is a nice big round number that will act like a magnet from both sides,” said Derwin. The January contract settled Wednesday at $1,010.70 per tonne, while March canola was at $982.80.

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Losses in Chicago Board of Trade (CBOT) soyoil futures pulled canola away from its highs during the week, but Derwin expected the Canadian oilseed would remain stronger relative to other vegetable oils due to its own supportive fundamentals.

“Canola is in a world of its own,” Derwin said, adding “we have very tight stocks… and unless we have very good yields and growing conditions, it will still be tight (in 2022-23).”

With prices as high as they are, Derwin noted canola could still see large price swings without influencing the overall uptrend.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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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