Canola on ICE stuck in sideways range as direction remains unclear

what happened

Canola futures have spent roughly a month and a half in a sideways trading band, with no clear sign of which way prices may eventually break out. David Derwin, a commodities investment advisor at Ventum Financial in Winnipeg, says the range has been very tight recently. He sees the lower boundary at C$800 and the upper at C$840 as the key levels.

Derwin estimates that the eventual move could reach about C$50 per ton. A catalyst could come from the Chicago soyoil market, which has also been moving sideways. The European rapeseed market is similarly rangebound. He said the trend is currently positive but could change, and that corn and wheat have come under pressure lately.

Seasonally, canola often peaks in May and June, then falls in September and October at harvest before stabilizing into the new year. This year is different, with prices already well above their level at the start of the growing season. Derwin suggests farmers consider put and call options to keep flexibility and protection when marketing. Information is according to Glacier FarmMedia.

why it matters

A narrowing range often comes before a sharper move, so oilseed and grain market participants are watching the C$800 and C$840 levels closely. A breakout in the direction of the main trend could have a meaningful effect on the Canadian canola market and related contracts.

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