By Glen Hallick, MarketsFarm
WINNIPEG, March 26 (MarketsFarm) – ICE Futures canola contracts were down at midday Tuesday, following news that Viterra Inc. has become the second Canadian grain company to lose its ability to sell canola to China.
Chinese authorities alleged Viterra’s canola was contaminated with hazardous pests.
By midday, the May canola was down C$4.20 to C$452.50 per tonne, having recovered somewhat from larger losses earlier Tuesday.
A Winnipeg-based trader commented the market has overreacted.
“It doesn’t mean much in the short-term. In the long-term it might. China is not buying canola anyways, so it doesn’t matter if they ban Viterra or not,” the trader stated.
China is believed to have cut its canola imports since January, following the arrest of a Huawei executive by Canadian authorities in December. Earlier this month China banned Richardson International from selling canola to the country.
He explained the canola has become vulnerable with, “lots of sellers potentially waiting,” including farmers who could feel pressured to do something.
The trader acknowledged canola is “a little bit vulnerable” as it lacks support underneath.
About 17,600 canola contracts were traded as of 10:49 CDT.
Prices in Canadian dollars per metric tonne at 10:49 CDT:
Canola May 452.50 dn 4.20
Jul 460.90 dn 4.30
Nov 474.20 dn 3.60
Jan 481.80 dn 2.80