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Commodity futures

Canola Futures Expected to Rise on Oversold Price Sentiment and Soybean Values

Strategic Insights

— 1 min read

Canola futures on the Winnipeg Commodity Exchange are expected to start the session on a steady to slightly firmer note, driven by oversold price sentiment and higher calls for CBOT soybean values. Brokers and traders anticipate a correction to Tuesday's late sell-off, with a potential increase of up to C$1.00 per metric ton. The absence of significant farmer deliveries of canola and steady pricing of export business by the Japanese are expected to contribute to the upward price momentum.

Key Takeaways:

  • Canola futures are expected to open steady to slightly firmer, driven by oversold price sentiment and higher calls for CBOT soybean values.
  • The absence of significant farmer deliveries of canola into the country elevator system in Western Canada will add to the upward price momentum.
  • Steady pricing of both old and new export business by the Japanese will help generate support in canola.
  • Rumors of Mexican interest in Canadian canola, as well as growing ideas of fresh Chinese and Pakistan interest, will stimulate buying in the canola pit.
  • The advances in canola will be limited by declines in Malaysian palm oil futures and steady to fractionally weaker calls for CBOT soybean values.
  • The large South American soybean crop, huge old crop soybean supplies in the US, and record large US soybean acreage this spring will further limit the upside in canola.
  • The continued erosion in profit margins for Canada's domestic crushers will also be limiting any price upside in canola.
  • Western barley futures are seen opening 50 cents on either side of unchanged, with poor demand, ample feed supplies in Western Canada, and steady to lower calls for CBOT corn futures generating some minor selling interest.
  • Feed wheat values are expected to be steady to slightly lower, with weaker calls for CBOT corn and wheat futures seen as bearish price influences.

Statistics:

  • Canola futures may rise by up to C$1.00 per metric ton.
  • CBOT soybean futures are expected to be higher.
  • Malaysian palm oil futures declined overnight.
  • The large South American soybean crop is expected to further limit the upside in canola.
  • The US soybean acreage this spring is expected to be record large.

Sources:

  • Resource News International
  • COMTEX
  • Winnipeg Commodity Exchange (WCE)

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