ICE weekly outlook: Canola prices could rebound

'There's nothing all that exciting to look at'

Reading Time: 2 minutes

Published: November 29, 2023

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(Dave Bedard photo)

MarketsFarm — Winnipeg-based trader Ken Ball from PI Financial is cautiously optimistic that canola prices can rebound in the short term.

The January canola contract closed at $702.30 per tonne on Wednesday a weekly loss of $7.40. The contract fell below the $700 level on U.S. Thanksgiving on Nov. 23, a day with little volume.

However, Ball said, canola is trying to recover.

“There’s nothing all that exciting to look at,” he said. “It’s going to hinge exclusively on how well the (soyoil) will do.”

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While Ball said a slower export pace than last year will put some pressure on canola prices, he cautiously thinks there could be some strength in both canola and soyoil in the short-term.

“Weather is going to come into play a lot, because the soybean market has been well supported by soymeal prices. But if the South American rainfall comes through over the next four to six weeks, that’s going to break the meal market and the bean market could fall off a lot,” he added.

“I think canola could rebound $20, $30, $40/tonne if soyoil could maintain its strength.”

Ball also believes the upcoming crop production report from Statistics Canada on Dec. 4 may already be affecting prices on ICE Futures.

The average trade estimate for this year’s crop was 18.3 million tonnes, derived from a range between 17.2 million and 19.7 million. In 2022-23, Canada produced 18.7 million tonnes.

“The general feeling is that this year’s crop is not that far off from last year. There were some poor areas; some good areas. Some areas improved; some didn’t,” he said.

Canola, he added, “seems a bit reluctant at times to go up. It’s lagging behind the (Chicago soy complex) a bit, which is not uncommon… but traders may be a little bit leery in buying canola if there is indeed a large upswing in production expected.

“If we do get a number around 18.3 million… that may keep the market somewhat subdued.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

About the author

Adam Peleshaty

Adam Peleshaty

Reporter

Adam Peleshaty is a longtime resident of Stonewall, Man., living next door to his grandparents’ farm. He has a Bachelor of Science degree in statistics from the University of Winnipeg. Before joining Glacier FarmMedia, Adam was an award-winning community newspaper reporter in Manitoba's Interlake. He is a Winnipeg Blue Bombers season ticket holder and worked as a timekeeper in hockey, curling, basketball and football.

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