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ICE Canada Weekly Outlook: Canola still stuck in neutral

Winnipeg, MB, May 16, 2018 (CNS Canada), May 16, 2018 (Commodity News Service Canada, Inc. via COMTEX) --

The ICE Futures Canada canola market held range-bound during the week ended May 16, hitting some of its best levels of the past month before retreating to hold within a well-established trading range.

"We've been in a fifty dollar range in canola going back quite a
few years," said David Derwin, commodities investment advisor
with PI Financial in Winnipeg.
He said current values in the C$530 per tonne area for the July
contract were near the higher end of that trading range, which
should be generating some decent hedging opportunities.
While there is little to indicate that prices are poised to
break out of that long-term range, nearby direction will likely
stem from weather during the growing season and activity in the
Chicago soybean market. Although, "canola has been much less
volatile than soybeans," said Derwin.
"An extra push with some weather concerns is not out of the
question, but a few things would have to fall into place," said
Derwin. He noted that dryness in parts of the Prairies was being
followed closely.
While a rally is always possible, losses are another possibility
if rain materializes and crop projections improve. Derwin said
there were currently good opportunities in the options market to
buy downside protection at cheap levels.

Phil Franz-Warkentin, Commodity News Service Canada

Copyright 2018 Commodity News Service Canada, Inc.

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