Glacier FarmMedia | MarketsFarm — ICE Futures canola contracts remained in a steady uptrend during the week ended April 16, despite the ongoing global tariff uncertainty, hitting their highest levels of the past year on a nearby weekly chart.
“We’re going to run out of canola soon, so the price has to stay strong,” said Lawrence Klusa of Seges Markets.
While Agriculture and Agri-Food Canada estimates total canola exports during the current marketing year at 7.5 million tonnes, the country has already moved 7.2 million tonnes with three-and-a-half months left in the marketing year. “So, there won’t be much left here shortly,” said Klusa.
Read Also
U.S. again halts cattle imports from Mexico over flesh-eating screwworms
The flesh-eating livestock pest New World screwworm has advanced closer to the U.S. border with Mexico, the U.S. Department of Agriculture said, prompting Washington to block imports of Mexican cattle just days after it allowed them to resume at a port of entry in Arizona.
With the July canola contract settling at C$680.70 per tonne on April 16, Klusa said values could eventually test the C$700 per tonne level.
Jamie Wilton of RJ O’Brien also tied the strength in the futures to the tightening balance sheet. Speculators covering short positions and moving to the long side of the market were also supportive.
Wilton expected canola area this spring could see a bump from the rising prices, especially given where wheat bids are in comparison.
However, while canola prices are strong, Klusa expected uncertainty over Chinese and U.S. tariffs were likely keeping farmers cautious as far as adjusting acres to any large extent despite the fact canola products are still moving to the U.S. and seed to China.
Both analysts said a lack of clarity on biofuel policy out of the United States was keeping some caution in the market.
