By Glen Hallick
Glacier Farm Media MarketsFarm – Intercontinental Exchange canola futures continued to push lower late Wednesday morning, as the threat of Donald Trump’s tariffs plans were still being felt in the market.
On Monday, United States President-elect Trump said he would slap 25 per cent tariffs on Canadian and Mexican goods imported into the U.S.
A broker called the situation “a complicated mess” as there’s also uncertainty as to whether the Trump administration will keep the biofuel tax credit that the United States biofuel industry is quite dependent on.
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The U.S. is Canada’s largest export customer of canola oil and should there be upheaval in the U.S. biofuel industry that will hurt canola.
“Canola oil will find a home, but it will be more expensive,” the broker stated, noting the transportation costs will be far more should the oil need to be shipped by vessels rather than currently by rail only to the U.S. If that were to occur, the broker said the price of canola will have to drop.
Losses in Chicago soyoil and European rapeseed added more pressure on canola, but gains in Malaysian palm oil lessened the impact. Crude oil was relatively steady, offering little direction to the vegetable oils.
The Canadian dollar recovered some lost ground by mid-session Wednesday. The loonie jumped to 71.37 U.S. cents compared to Tuesday’s close of 71.01.
Approximately 43,400 canola contracts were traded as of 10:50 am CST, with prices in Canadian dollars per metric tonne:
Price Change Canola Jan 570.70 dn 9.60 Mar 584.60 dn 9.60 May 596.90 dn 8.60 Jul 602.10 dn 7.90
