WINNIPEG--The ICE Futures canola market saw some independent strength relative to other oilseeds during the week ended Wednesday as speculative positioning and the need to ration tight old-crop supplies provided support.
Canadian canola stocks as of March 31 were pegged at 5.95 million metric tons by Statistics Canada on Tuesday. That was up from 5.16 million at the same time the previous year, but well below the five-year average of 8.76 million. Commercial stocks of 1.28 million tons were down by about 460,000 tons from the same point the previous year and below pre-report expectations.
"It appears that supplies will be quite a bit tighter going into the new crop," said Ken Ball, of PI Financial in Winnipeg. He questioned why the missing stocks hadn't appeared in previous reports but speculated 2022-23 production may have been overstated.
Canola crush margins are still relatively wide but have lost about C$20 to C$30 per ton over the past week and are well off their highs near C$300 per ton seen earlier in the year, as the strength in canola came at the same time as soyoil moved lower.
While canola could be due for more strength, any moves will be relative to the soy complex. Soybean seeding in the U.S. is progressing rapidly, and Mr. Ball said he expected the monthly supply/demand data from the Agriculture Department on May 12 would be bearish for prices.
The Canadian Prairies also generally have good moisture for germination, but seeding has been more varied. About half of the Prairies will likely need some follow-up precipitation in the next two to three weeks, Mr. Ball said, with that weather uncertainty another supportive influence on prices.
Source: MarketsFarm, philfw@farmmedia.com
(END) Dow Jones Newswires
05-10-23 1716ET
