MarketsFarm — ICE Futures canola contracts succumbed to pressure from comparable vegetable oils at midweek, after showing strength earlier in the week.
Ken Ball of P.I. Financial said lower soyoil values put canola “under tremendous pressure.” Nearby soyoil contracts were down by about a penny on Wednesday.
Earlier in the week, rumours swirled regarding the possibility of a renegotiated trade deal between Canada and China. That sparked some trading activity and provided some support to canola prices.
“There’s still a lot of chatter about negotiations with China and what they mean,” said Ball.
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Producer groups across Canada expressed a mix of relief and cautious optimism following the news that Canada had struck a deal with China to lower tariffs on canola, peas and other goods, in return for relaxing duties on Chinese electric vehicles.
Despite the lack of buying from China, total canola exports are set to outpace last year’s. As of March 22, total Canadian canola exports total 6.11 million tonnes, due to dramatic increases in purchases from the European Union, Bangladesh and the United Arab Emirates.
Spreading activity also provided paltry support to canola prices, as traders sold oil and bought canola.
“That’s keeping prices propped up a bit,” Ball said.
Canola prices also found strength at midweek from a flagging Canadian dollar. The loonie closed at 70.34 U.S. cents on Wednesday.
— Marlo Glass reports for MarketsFarm from Winnipeg.
