CNS Canada — The ICE canola market is currently at the mercy of the soybean market as it awaits this week’s G20 meeting between Chinese President Xi Jinping and U.S. President Donald Trump.
“We’ve got the big pop in the soybeans in anticipation of some positive developments at this weekend’s G20 meetings… we are getting some lift here,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
Chicago Board of Trade soybean contracts are back up close to recent highs as optimism about the U.S./China meeting has pushed them higher. Canola hasn’t increased quite as much, though, and isn’t near its November highs.
Soyoil has been on the upswing with the rest of the soy complex, which has been supportive for canola. Other global oilseeds, such as palm oil, haven’t benefitted from the soyoil rally.
“Veg oils around the world will also have to continue to inch higher if canola’s going to continue to bounce,” Ferley said.
With the bounce canola has experienced, Ferley thinks farmer movement could pick up again as farmers take advantage of the higher prices.
The Canadian dollar has also been weaker of late, which has been supportive for canola contracts.
“The dollar’s our friend here right now, hopefully that continues for growers… but Mr. Trump could tweet anything here and this thing could come unraveled very quickly,” Ferley said.
The latest Statistics Canada report on production of principal field crops is released next week but isn’t influencing the market yet as the G20 meeting dominates instead.
The market is also paying more attention to the fundamentals, Ferley said, such as Brazil’s large soybean acres and the large soybean and canola crops upon which U.S. and Canadian farmers are sitting.
“The fundamentals are going to continue to struggle here and growers need to continue to sell the rallies to take advantage of the pops in the market,” he said.
— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.