The future of trade with China remained the dominant news in the Winnipeg canola market on Friday.
News that two shipments to China had been canceled weighed on canola for the second day, but the price drop was not as steep as on Thursday.
Chicago soybean prices also played into the weaker canola market. Indeed, early in the day canola had regained some of Thursday’s losses as it followed a strong rally in soybeans on continued delays in the U.S. harvest and forecasts for more rain next week. However, soybeans saw a bout of profit taking late in the day and the November contract closed up half a cent at $10.06 US per bushel.
On Thursday, the market learned that China had informed the Canadian Food Inspection Agency that as of Nov. 15 it would accept canola only if it was accompanied with a certificate showing it is free of the plant disease blackleg.
On Friday, Reuters News Service reported that a shipment in November and another in December had been cancelled because the Chinese buyers were worried their government might hold the cargoes over the blackleg issue.
Federal agriculture minister Gerry Ritz told Reuters the issue is serious and Canadian agriculture and food safety experts would be dispatched within days to China to work with officials there to resolve the issue,
Canola varieties have resistance to blackleg, but the fungus is found in crop residue and gets on seed. The fungus is not a danger to people and the Canola Council of Canada says it can’t understand why the Chinese want regulations on seed destined for processing into oil and meal.
November canola settled at $380.40 Cdn per tonne, down $3.20 on a volume of 5,142 trades.
January closed down $3.80 at $387.70 on 11,113 trades.
March was down $4.90 at $394.60 on 1,449 trades.
The Canadian dollar slipped to 95.17 cents US at noon Friday, down from 95.37 cents Thursday.
The U.S. dollar was $1.0508 Cdn Friday compared to $1.0485 Thursday.
November barley lost some of its recent gain, dropping $4.10 to $160.90 per tonne. January barley fell $1.10 to $160.90.
