Glacier Farm Media | MarketsFarm — Canola has been on something of a tear for about a month with increases in 16 of its last 20 sessions on the Intercontinental Exchange as of Feb. 12. Despite a great amount of political chaos surrounding all of the markets, the Canadian oilseed is poised to climb higher for the rest of February, said broker Tony Tryhuk of RBC Dominion Securities in Winnipeg, Man.
“When you look at a chart, it’s been a phenomenal ride ever since early-to-mid-January,” Tryhuk commented. “The charge has been really bullish. The Statistics Canada report confirmed stocks are tight.”
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On Feb. 7, StatCan issued its report on grain stocks as of Dec. 31, with combined on-farm and commercial canola stocks of nearly 11.4 million tonnes, down 19.2 per cent from the previous December. Tryhuk said domestic and foreign demand for canola continued to be “robust” which further underpinned the oilseed’s values.
He noted the March contract is “more about order flow than fundamentals” and the May contract is now the main focus.
“There’s a target dating back to Nov. 8 of a high of $687 (per tonne). That’s probably the short-term target. We are probably marching to $700 because of tight ending stocks and the fact that the farmer has chewed through all of his carryover stocks from last year,” the trader explained.
Tryhuk stated the farmer will demand more for their 2024/25 canola and are willing to wait for those increases.
Meanwhile, constant threats of tariffs being made by United States President Donald Trump has kept the markets on edge for the most part. Also, there continued to be uncertainty over the future of Canadian canola oil as an eligible feedstock for U.S. biofuel tax credits. While the Biden administration omitted canola oil from its tax credit changes last month, there has yet to be a clear indication of what the Trump administration plans to do.
