WINNIPEG, Manitoba--As the rally in canola on the Intercontinental Exchange continued Wednesday, an analyst stressed it isn't when this upswing ends, but where.

David Derwin of PI Financial in Winnipeg spoke of when canola prices were falling, and they broke through that psychological barrier of C$800 per metric ton on their way down.

"That was the key area of support. That would be a natural place for these prices to migrate back to," Mr. Derwin said, pointing at old- and new-crop contracts.

"That would be a magnet to pull prices back up to those levels," he added.

The current upswing in canola has largely been because of the speculative funds looking to get out of the enormous short positions they built.

Mr. Derwin said there have been other factors influencing the gains in the Canadian oilseed.

"We are entering what sometimes is a bit of a seasonally upward movement, he said, noting this could last through April to June. Also, there has been support from gains in the Chicago soy complex, European rapeseed and Malaysian palm oil.

"There's room for these [canola] markets to move another C$50 per ton," Mr. Derwin said.

He cautioned the overall trend is still to drift lower, but with fluctuations up and down.

This is a good time for farmers to take advantage of canola prices, he said, and not to be complacent, and they should add additional hedges and make more new-crop physical sales.

"The bottom line of it, is the risk is always to the downside for the farmers," Mr. Derwin said.


Source: MarketsFarm, news@marketsfarm.com


(END) Dow Jones Newswires

03-29-23 1714ET