Canola prices showed impressive resilience during the week ended April 24 after being battered by outside markets earlier in the week.
On April 20, West Texas Intermediate (WTI) crude oil futures dropped into negative territory to close at minus US$37.63, as traders bailed out of the May contract before its expiry date. The June contract fared slightly better, holding above US$15 per barrel.
Canola prices followed suit, with ICE Futures’ June contract dropping over $4 by Tuesday’s close to $459.40. However, prices rallied at mid-week due to support from comparable vegetable oils. By Thursday’s close, May canola was at $461.70.
The soy complex on the Chicago Board of Trade found strength due to optimism regarding China purchasing more soybeans and corn from the United States. During the week ended April 24, China ordered just over 400,000 tonnes of soybeans for delivery in the 2019-20 marketing season. During the week ended April 16, total U.S. soybean exports had totalled 345,000.
Aside from the Phase 1 trade agreement signed with the U.S. months ago, China may also be looking to restock its reserves after dealing with intense lockdowns due to the COVID-19 pandemic. However, there hasn’t been any indication that China will come back to the table to reopen canola trade negotiations with Canada.
The Canadian dollar also moved in lockstep with crude oil prices, not providing much in the way of direction to canola values. The dollar crept up over 71 U.S. cents on Thursday, but prolonged uncertainty in Canada’s oil sector kept a lid on significant gains.
Statistics Canada announced April 21 that the principal field crop areas report will be rescheduled, from April 24 to May 7. The agency will also issue its report on grain stocks as of March 31 on May 7.