ICE Futures Canada canola contracts held above the $520-per-tonne mark during the week ended March 26, as speculative buying helped offset the bearish influence of rain in South America.
From March 16 to March 23, canola lost $2.50 to end Friday at $520.60 per tonne.
The week started off with a thud, as beneficial rains in Argentina sent oilseed prices plunging throughout North America. The moisture came too late for the bulk of the crop but did create some optimism that later-planted fields could still benefit. Large funds liquidated some of their positions and traders began to back off of risky positions.
As well, the swelling size of Brazil’s soybean crop continued to temper the advances. Some recent estimates suggested the size of the crop could hit 118 million tonnes. That would be roughly four million more than last year.
A recent snow across Western Canada seems to have also softened the outlook for prices. Most analysts expect the moisture will help alleviate some of the excess dryness that has been plaguing parts of Saskatchewan and Alberta.
This week, the U.S. Department of Agriculture is scheduled to release its planting intentions report, which should give canola more indications of where prices are headed. At this stage, it appears the report could be a bearish one if the outlook for U.S. soybean acreage increases. The report is set to come out at 11 a.m. CT on Thursday.
The Canadian dollar lost roughly 1-3/4 cents over the week, to end at 76.41 U.S. cents.
Supportive factors for canola included the Malaysian government’s decision to impose an export tax on palm oil exports, technical support and slow farmer selling.
The U.S. soybean market lost 21.25 U.S. cents per bushel on the week, pressured by rain in Argentina and fears over potential trade tariffs between the U.S. and China. U.S. President Donald Trump’s decision to impose tariffs on China only heightened expectations that the Asian giant could respond with penalties of its own on agricultural products.
The corn market also lost ground, falling 5.5 U.S. cents to a Friday closing price of US$3.77 per bushel. Corn had been climbing with solid export activity; however, Chinese tariffs on U.S. pork cut into demand for livestock feed. On the other hand, ideas that some farmers in the U.S. Midwest were preparing to switch out some of their corn acres in favour of soybeans bolstered prices.
Chicago wheat futures lost about 7.5 U.S. cents per bushel on the week to fall to US$4.60, as some rain and snow fell on parts of the dried-out U.S. Plains. Weekly exports were solid, though, which kept prices supported.