Glacier FarmMedia —The ICE Futures canola market was fell sharply lower on Wednesday as markets reacted to news of a tentative two-week ceasefire between the United States and Iran.
- Brent crude oil was down by 13 per cent late in the day at roughly US$95 per barrel.
- Reopening of the Strait of Hormuz was included as part of the ceasefire agreement, but Israeli attacks on Hezbollah in Lebanon saw Iran reclose the waterway in retaliation — leading to some uncertainty over how long the ceasefire may hold.
- Chicago soyoil, European rapeseed and Malaysian palm oil futures were all lower, contributing to the softer tone in canola.
- Chart-based speculative selling added to the softer tone in canola as the May contract broke below the lower end of its nearby trading range.
- However, historically wide crush margins of about C$350 per tonne above the nearby futures likely had end users buying on the way down.
- There were 99,898 contracts traded on Wednesday, which compares with Tuesday when 58,833 contracts changed hands. Spreading accounted for 55,898 of the contracts traded.
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