S&P GSCI GRAINS INDEX WINNIPEG, Manitoba---The ICE Futures canola market traded within a wide C$30 per tonne range during the first week of November, with the nearby price trends pointing sideways.
"There are a lot of supportive elements for canola, but something is holding it back," said Ken Ball of Ventum Financial in Winnipeg. He noted that canola was lagging other markets, such as Chicago soyoil and Malaysian palm oil, to the upside.
"If the vegoils can stay firm, we might be able to see a little bit of upside in canola in the near term at least," said Ball.
He added that ideas that the 2024/25 Canadian canola crop was likely smaller than the official estimates had prompted end users to get in the market early.
"I imagine our exports will taper off sharply later on, but for now they're strong," said Ball, noting that the offshore movement was likely heavily front-loaded in 2024/25. He estimated that in a normal year with comfortable supplies, about 65 per cent of the exports would move in the first six months of the marketing year, with the remaining 35 per cent in the last half of the year.
The possibility of Chinese tariffs on Canadian canola continues to overhang the market, as China moves forward with its anti-dumping investigation into Canadian canola. While rumours that China could be close to imposing measures against Canadian canola circulated the market during the week, confirmation was lacking and Ball noted that China was still actively buying for now.
Meanwhile, re-election of Donald Trump to the United States presidency could lead to other adjustments to world trade flows going forward. Trump has promised to impose tariffs on all imported goods, with retaliation from China on the country's soybean and corn exports also likely.
Analyst Mike Jubinville of MarketsFarm expected politics would dominate the agricultural markets over the next four years of the Trump presidency, with the impact on trade flows and prices an unknown for now.
Source: Commodity News Service Canada, news@marketsfarm.com
(END) Dow Jones Newswires
11-06-24 1713ET
