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Commodity futures

Canola and Feed Grain Futures Expected to Open on a Mixed Note

Strategic Insights

— 1 min read

Market watchers expect canola and feed grain futures at the Winnipeg Commodity Exchange to start Friday's session on a mixed note, but with a bias towards the upside due to firmer calls for most CBOT grain and soybean contracts. The absence of fresh fundamental inputs and the upcoming Canadian Thanksgiving Day holiday weekend may lead to choppy activity. Traders are eyeing the potential for canola values to move up due to concerns about harvest delays in Western Canada and gains in CBOT soybeans.

Key Takeaways:

  • Canola futures are expected to open C$1.00 per metric ton on either side of unchanged, with some traders hoping that gains in CBOT soybeans will pull prices up.
  • Concerns about harvest delays in Western Canada may encourage light buying in canola, with domestic crushers and exporters also expected to be light buyers.
  • Commodity funds are believed to be short roughly 8,000 November canola contracts, which could trigger a fresh round of short-covering if the contracts move above their 10-day exponential moving average.
  • Technically, both the November and January canola contracts have moved above their 10-day exponential moving average, which is seen as constructive.
  • A rally in the Canadian dollar early Friday morning is expected to limit price influences, while improved harvest weather in Western Canada may spark downward price action.
  • Western barley and feed wheat futures are expected to open mostly steady in choppy trade, with inter-commodity spreading by commercials making up the bulk of the activity.
  • The absence of significant fresh end-user demand and ongoing ideas that feed supplies in Western Canada will be larger than anticipated are seen as undermining price influences for the feed complex.

Statistics:

  • Canola futures are expected to open C$1.00 per metric ton on either side of unchanged.
  • Commodity funds are believed to be short approximately 8,000 November canola contracts.
  • The November and January canola contracts have moved above their 10-day exponential moving average.
  • The Canadian dollar rallied early Friday morning, limiting price influences.
  • Harvest weather in Western Canada is expected to improve, potentially sparking downward price action in the canola pit.

Sources:

  • Resource News International, "Canola and Feed Grain Futures Expected to Open on a Mixed Note", Oct 07, 2005
  • Winnipeg Commodity Exchange (WCE)
  • CBOT (Chicago Board of Trade)
  • COMTEX

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