ICE Futures Canada canola contracts held rangebound during the week ended Wednesday, but settled near the lower end of that range, as positioning ahead of the U.S. Department of Agriculture’s supply/demand report put some pressure on Canadian futures.
“This is an anything goes kind of report,” said Mike Jubinville of ProFarmer Canada on USDA’s first supply/demand report in two months, due out Friday.
With market participants generally anticipating upward revisions to the size of the U.S. soybean crop, he said anything less than the U.S. national average for yields will be bullish for oilseed prices.
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Canada also grew a big canola crop in 2013, with trade guesses generally coming in well above the already record 16 million tonnes forecast by Statistics Canada.
Logistics issues moving those large supplies also have the potential to be bearish for prices, said Jubinville. “But, on the other side the demand is still strong,” he added, noting “we will chew through the canola inventory.”
As a result, the market is need of a new catalyst from a fundamental standpoint to justify a move higher or lower.
“Friday’s report may set the tone for grain markets over the next few months,” said Jubinville.
For canola, the January contract finds itself in a range between $480 to $485 per tonne on the downside, and $500 to $505 to the upside. Jubinville said there were more reasons to go lower than higher, but questioned when that may happen.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
