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Commodity futures

Canola Futures Expected to Start Week on Steady to Slightly Weaker Footing

Strategic Insights

— 1 min read

Canadian canola futures were anticipated to begin Tuesday's trading session on a steady to slightly weaker note, as market analysts pointed to various bearish factors, including declines in the CBOT soybean complex, a drop-off in export demand, and a stronger Canadian dollar. Traders also noted that good seeding progress in Saskatchewan and Manitoba was contributing to downward price momentum. However, the potential for leftover commodity fund buying and new crop canola demand from domestic crushers were seen as minor supportive factors.

Key Takeaways:

  • Canola futures were expected to start Tuesday's session on a steady to slightly weaker footing due to anticipated declines in the CBOT soybean complex and drop-off in export demand.
  • The strong Canadian dollar, moving above the 90 US cent level, was seen as adding to bearish sentiment in the canola market.
  • Good seeding progress in Saskatchewan and Manitoba contributed to downward price momentum.
  • The absence of fresh export demand from China, Mexico, and Pakistan added to weakness in canola.
  • The Golden Week holiday in Japan was expected to keep exporter interest from this country light.
  • The lack of a threat to new crop North American oilseed output tempered the upside in canola.
  • Elevator company hedge selling on the open was also expected to put downward pressure on canola.
  • Minor support was seen from leftover commodity fund buying and new crop canola demand from domestic crushers.

Statistics:

  • Canola futures were seen opening unchanged to down C$1.00 per metric ton.
  • CBOT soybean complex was expected to decline, contributing to downward pressure on canola.
  • Malaysian palm oil futures declined overnight, sparking minor selling in canola.
  • The Canadian dollar moved above the 90 US cent level, adding to bearish sentiment in canola.
  • 3-day cycle of commodity fund buying was incomplete, potentially leading to more buying.

Sources:

  • Resource News International
  • Winnipeg Commodity Exchange (WCE)
  • CBOT (Chicago Board of Trade)

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