WINNIPEG, Manitoba--The ICE Futures canola market saw some large price moves during the week ended Aug. 4, hitting their lowest levels in a month as investors booked profits before recovering to hold relatively range-bound overall. More choppiness is expected over the next few weeks, as the market waits to get a better handle on the size of the 2021/22 crop.
Hot temperatures and a lack of moisture have cut into the crop prospects across most of the Prairies, with production unlikely to live up to early expectations.
The 19.9-million-ton production forecast by Agriculture and Agri-Food Canada is "at least two million tons too high," said Errol Anderson of Pro Market Communications in Calgary, Alberta, adding that actual production was likely much smaller.
Statistics Canada's official survey-based estimates won't be released until the end of August, and until the production is better known Anderson expected the futures to see some wide price swings.
"It will stay very volatile right into the fall market," said Anderson.
Recent activity has been bearish from a technical standpoint, with the highs possibly in for the time being, according to Anderson. On the other side, he placed support in the November contract at C$800, with the next support at C$770 per ton.
"If the U.S. soybean crop is bigger than expected and we get better yields on canola, I could see the November contract potentially breaking below C$800," said Anderson.
Source: Commodity News Service Canada, news@marketsfarm.com
(END) Dow Jones Newswires
08-04-21 1651ET
