ICE Futures Canada canola contracts held within their well-established trading range during the week ended May 18, with all eyes on weather conditions at this time of year.
Some much-needed rain hit Winnipeg and surrounding areas of Manitoba on Friday, but western parts of the province and Saskatchewan remain on the dry side and in need of more precipitation.
Canola futures are near the upper end of a very long-term trading range, but don’t appear poised to break higher for the time being.
Exports continue to run behind normal, while old-crop supplies are large and new-crop acres are generally expected to be up on the year.
In the U.S. two weather stories were at play, with dryness in the southern Plains boosting wheat, while too much rain in the Midwest could cause planting delays for soybeans and corn.
Wheat and corn both ended the week on a slightly firmer footing, although soybeans trended lower overall.
All three markets were higher by Tuesday morning, May 22, with dryness concerns in a number of major wheat-growing regions of the world underpinning the futures.
Aside from the nearby weather fundamentals, global trade issues also took a leading role in the agricultural markets during the week. A delegation from China was in Washington to discuss the ongoing tit-for-tat dispute between the two countries. While a number of sticking points remain, news broke on Friday that China was abandoning an anti-dumping investigation into U.S. sorghum imports. The move on sorghum generated some optimism that China would also back down on proposed tariffs on soybeans and other commodities.
NAFTA talks were also underway during the week, with little reported progress.
Meanwhile, the recent move by the U.S. to back out of the Iranian nuclear deal brought some uncertainty to the global political front and sent oil prices rising. The equally fraught relations with North Korea were another factor in the background, as there are still plenty of question marks ahead of a proposed meeting between North Korea’s Kim Jong Un and U.S. President Donald Trump.