WINNIPEG, Manitoba--A modest attempt at correcting higher was met by stiff resistance in the ICE Futures canola market, with a general downtrend still intact as the futures work to uncover some demand.
"We need to go lower to get some export business accomplished," said Jamie Wilton of RJ O'Brien in Winnipeg on the likelihood of additional losses in canola.
Canada has exported 3.0 million tonnes of canola through 27 weeks of the 2023/24 marketing year, well short of the 4.5 million tonnes exported by the same time the previous year, according to Canadian Grain Commission data.
Wilton added that farmers are still holding large amounts of unpriced canola, making them heavily long the market and looking to sell whenever the futures try to move higher.
Total producer deliveries of canola into the commercial pipeline as of week 27 of the marketing year of 8.6 million tonnes were 16 per cent behind the previous year's pace.
On the other side, speculative fund traders are heavily short the market, and content to watch their profits grow as prices trend lower, according to Wilton.
With newly harvested South American soybean crops starting to weigh on the Chicago soy market, Wilton expected it would take an outside catalyst, such as a weather issues somewhere in the world, to break canola out of its downtrend.
"We need a weather scare, and I don't think there's anything substantial enough out there," added MarketsFarm analyst Bruce Burnett.
Source: Commodity News Service Canada, news@marketsfarm.com
(END) Dow Jones Newswires
02-14-24 1640ET
