ICE canola weekly outlook: Politics driving trade

Reading Time: < 1 minute

Published: December 4, 2024

Canola plants in flower in a field north of Lorette, Man. on July 20, 2022. (Dave Bedard photo)

Glacier FarmMedia | MarketsFarm — The ICE Futures canola market climbed off nearby lows over the week ended Dec. 4, although the correction ran into resistance and values remain at the whim of outside forces.

“It’s all politics,” said MarketsFarm analyst Mike Jubinville on the factors moving the canola market. In addition to the threat of tariffs from the United States on all Canadian imports, uncertainty over U.S. biofuel policy under Donald Trump was also keeping some caution in the markets. Over 90 per cent of Canada’s canola oil exports are currently destined for the U.S., with much of that used in the production of biodiesel.

Read Also

Detail from the front of the CBOT building in Chicago. (Vito Palmisano/iStock/Getty Images)

U.S. grains: Wheat futures rise on supply snags in top-exporter Russia

U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.

The possibility of a trade dispute with China, the largest export customer for Canadian canola seed, is also still overhanging the market.

However, the fundamentals for canola remain supportive. Jubinville noted that Canadian canola is trading at a large discount to European rapeseed, which should be encouraging more European buying interest.

Updated production estimates from Statistics Canada on Dec. 5 could provide some nearby direction for canola, although barring a major surprise Jubinville expected any market reaction to the data would be short-lived.

Average trade guesses call for a cut to the 18.98 million tonne-crop forecast in September, with some analysts of the opinion production was below 18 million tonnes. However, there are also a few calls for a steady to higher reading, which would be bearish.

About The Author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

explore

Stories from our other publications