Canola futures have been holding rangebound over the past week, looking for some direction.
"None of these markets are flashing any strong signals that there's much going on. . . they're waiting for fresh news and there isn't much around right now," said Ken Ball of PI Financial in Winnipeg.
While uncertainty over the size of this year's drought-stricken Canadian canola crop remains supportive, Ball noted that canola is very expensive compared to other oilseeds and the market has done its job of rationing demand. Exports are already down substantially on the year, although they should pick up somewhat as more new-crop supplies become available.
Looking forward, canola prices "will have to be expensive, but expensive is a relative word," Ball said, adding the direction of the canola market will depend on what happens in Chicago soyoil. If soyoil prices fall, canola could also break lower but still be high priced compared to the product values, he said.
Beyond the North American harvest, the next big market factor on the horizon is Brazil, according to Ball. Farmers there are just starting to seed the 2021-22 soybean crop, with any weather issues likely to provide support while improving conditions would be bearish.
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