By Glen Hallick, MarketsFarm
WINNIPEG, March 22 (MarketsFarm) – ICE Futures canola contracts were weaker significantly the end of trading on Friday, due to comments from the Canola Council of Canada.
The council issued a press release on Thursday after the markets closed, which said China had ceased purchasing canola from Canada. While previous contracts were being fulfilled, all new sales to China had ceased completely.
A Winnipeg-based analyst stressed the markets had a “knee-jerk reaction” to the news. He said the markets already knew canola sales to China had pretty ground to a halt in January.
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Canola exports to China had been a record pace for the 2018-19 crop year, until a spat developed between Canada and China, following the arrest of a Huawei executive in December.
In 2018, canola exports to China were worth $2.8 billion. About 40 per cent of Canada’s canola exports had been going to China.
The Canadian dollar continued its downward trend on Friday. The loonie was down to 74.55 U.S. cents by mid-afternoon.
About 34,720 contracts were traded on Friday, which compares with Thursday when 13,150 contracts changed hands.
SOYBEAN futures at the Chicago Board of Trade were weaker on Friday.
In the United States, the National Oceanic and Atmospheric Administration has projected flooding to continue into May. Major flooding has already struck a number of U.S. states, and will hit several more as the spring melt progresses. Most of the eastern half of the U.S. will experience minor to major flooding this spring.
U.S. President Donald Trump has now said a trade deal with China “probably will happen.” Recently, Trump said tariffs on imports from China might stay in place, and that was taken as a sign negotiations were in trouble. Top U.S. officials will travel to China next week for trade talks.
On Thursday, a U.S. federal judge refused to throw out a case against Bayer regarding Round-Up. The jury in the trial recently found that Round-Up can cause cancer. The trial is now in its second phase in which Bayer’s liability will be determined and if the company needs to pay damages.
CORN futures were stronger on Friday on news that China purchased approximately 464,540 tonnes of corn. The sale marks China’s largest purchase of U.S. corn since October 2013, according to a report.
The flooding has cut U.S. ethanol production by 13 per cent, reduced grain shipments and may force farmers to switch their planting intentions from corn to soybeans.
WHEAT futures were mixed on Friday. Chicago and Kansas City wheat were weaker, but Minneapolis wheat finished stronger.
U.S. farmers are expected to plant their fewest wheat acres in 100 years. Projections are for 45.9 million acres in 2019, a five per cent drop from 2018, according to a Farm Futures survey.
The U.S. Department of Agriculture will release its crop projections on March 29.
