WINNIPEG, Manitoba--As the turnaround in canola continued, an analyst said three factors are underpinning the swing upward.

David Derwin, commodities futures adviser for Ventum Financial in Winnipeg, pointed to the gains made by soyoil futures on the Chicago Board of Trade, the weakening of the Canadian dollar and the reduction in the canola harvest made by Statistics Canada.

Over the last two weeks, Chicago soyoil has added 1.34 cents to close Wednesday at 42.26 U.S. cents per pound.

During the same period, canola advanced C$57.50 to C$622.10 per ton. Then the Canadian dollar gave up about 6-10ths of a cent at 70.65 U.S. cents.

On Dec. 5, StatCan issued its principal field crop report, with canola production for 2024-25 cut to 17.84 million metric tons from the 18.98 million estimated in September.

"There's an inherent move upward in canola because of the StatCan report, but a lot of it can be explained by a weaker currency," Derwin said, noting that movements in Chicago soyoil almost always pull along ICE canola.

Canola could hold within a range of C$600 to C$625/ton for the balance of December, he said.

"I wouldn't be surprised we are coming into a little bit of resistance," Derwin said.

Another supportive factor Derwin noted were the speculative funds, as they could add to their short positions.

Complementing StatCan's cut to canola production was the Dec. 10 U.S. Agriculture Department's world oilseed report. The USDA reduced its call on Canada's 2024-25 canola crop to 18.80 million tons from the 20 million the department held on to for the last few months.


Source: MarketsFarm, news@marketsfarm.com


(END) Dow Jones Newswires

12-11-24 1731ET