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ICE weekly outlook: Little for canola bids to stand on

MarketsFarm — There wasn’t much available to sustain a bounce in canola prices, from where David Derwin sits.

“It’s really tough to say. We had canola drop so much over the last couple of months and sometimes it’s ‘buy the rumour, sell the fact,’” said Derwin, a commodities portfolio manager with PI Financial in Winnipeg.

A weather rally could come into play, he said, but such are difficult to predict.

Canola prices can be influenced in part by a seeding rally, but he pointed out that will end shortly after farmers wind up planting for this year.

With farmers in the field, there have been few deliveries, which has provided some support. However, the record-level amounts farmers have in their bins — estimated by Statistics Canada at 8.8 million tonnes — will eventually enter the commercial pipeline.

There was some psychological support for canola after Canada put forward a statement on sanitary and phytosanitary (SPS) measures in agriculture Tuesday at the World Trade Organization’s general council meeting.

Canada, in its statement, demanded China produce its evidence that canola imports received in March from Richardson International and Viterra were contaminated. China has yet to agree to meet with a scientific delegation from Canada to discuss the matter.

Any spillover from soybeans on the Chicago Board of Trade would be problematic, as bids have been trying to recover from the 42-year low they struck Monday.

The massive drop in prices came after U.S. President Donald Trump threatened to hike tariffs on imports from China. Trump said he would increase tariffs from the current 10 per cent to 25 per cent as of Friday, after China reportedly backtracked on a number of provisions coming out of trade talks.

High-level negotiations resume Thursday in Washington and are expected to continue for two or three days.

— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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