WINNIPEG, Manitoba -- The ICE Futures canola market was once again trading rangebound for the week ended Feb. 8, as the March contract was left unchanged from one week earlier at C$828.20.
The contract oscillated between a range of C$819.40 and C$837/ton during the week, all the while seemingly immune from larger price ranges seen in soybeans and soyoil.
Errol Anderson, from ProMarket Communications in Calgary, said that one of the reasons for canola's lack of volatility has been the Canadian dollar hovering around 75 U.S cents and putting pressure on canola prices.
"That is the top end of the trading range for the Canadian dollar," Anderson said, adding that he believes the loonie is overbought. "If we start to break back down, I could see the loonie moving down to 73, possibly 72.5. What would trigger that would be a pullback in crude oil and a recovery in the U.S. dollar."
The U.S. Department of Agriculture released its monthly supply/demand estimates on Feb. 8, but carryout totals fell in line with trade expectations, causing very little movement on the markets. The USDA projected soybean ending stocks at 225 million bushels, up 15 million from the January report.
"The USDA didn't really shake the bushes too much," Anderson said. "The U.S. will start losing its market share to South America as the new crop South American crop hits the world market."
He added that canola has done very well considering recent declines in the soyoil market. Anderson also anticipates crude oil prices to trend downwards in the short term.
"It wouldn't surprise me that crude at some point will move down certainly towards US$70 per barrel," he said. "Now if we do that, then canola would respect that."
Source: Commodity News Service Canada, news@marketsfarm.com
(END) Dow Jones Newswires
02-08-23 1745ET
