MarketsFarm — Expect canola and other oilseed markets to remain choppy for the time being, according to trader Ken Ball of PI Financial in Winnipeg.
“All of the markets are very choppy and erratic. They’re very nervous markets,” Ball emphasized, noting war in Ukraine and drought in Argentina are having some of the biggest impacts on vegetable oils.
Reports said Russia ramped up its bombardment of Ukraine’s infrastructure after several Western countries said they will send dozens of battle tanks to the beleaguered nation. The war continued to impede Ukraine’s grain and oilseed production and its exports.
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“Argentina has had some nice rains in the last few weeks, but they have got to get two or three more,” Ball said.
Soymeal on the Chicago Board of Trade (CBOT) is the most sensitive commodity when it comes to the drought in Argentina, as the country is a world leader in soymeal exports.
That said, Ball said he believes markets will stay choppy for the time being. Although there has been speculative money coming into canola and other oilseeds, there’s really nothing that stands out to signal a major course change.
Spec traders, he said, are not interested at this time in trying to push prices very far — “not unless they got some real ammunition behind them and I just don’t think they quite got it.”
Ball also stressed Argentina’s production woes because of its drought are somewhat overblown. With a record soybean crop set to be harvested in Brazil, the continent is expected to have its largest supplies. While Argentina is expected to glean around 40 million tonnes of soybeans, Brazil is looking at a record 152 million tonnes.
— Glen Hallick reports for MarketsFarm from Winnipeg.
