ICE Canada Morning Comment: Canola tumbles on China’s tariff plans
China retaliates against levies on its EV's, steel, aluminium
By Glen Hallick
Glacier Farm Media MarketsFarm – China lowered the boom on Canadian canola over the weekend which sent Intercontinental Exchange canola futures plummeting on Monday morning.
In retaliation for the Canadian government imposing a 100 per cent tariff on imports of Chinese-made electric vehicles along with 25 per cent levies on its steel and aluminium, the Chinese government said it will slap 100 per cent tariffs on imports of Canadian canola oil, oil cakes and peas effective March 20. Plus, China will put a 25 per cent levy on imports of Canadian pork and aquatic products.
China’s long-expected move sent old crop canola tumbling limit down C$40 per tonne in very heavy overnight trading, while losses in the new crop contracts were not as severe.
Declines in the Chicago soybeans and soyoil, along with losses in European rapeseed and Malaysian palm oil added to canola’s woes on Monday morning. Small upticks in crude oil attempted to remove some of the negativity in the vegetable oils.
The Canadian dollar pulled back on Monday morning, with the loonie at 69.37 U.S. cents compared to Friday’s close of 69.58.
Approximately 57,100 contracts were traded by 8:35 CDT and prices in Canadian dollars per metric tonne were:
Price Change Canola May 605.00 dn 40.00 Jul 618.50 dn 35.40 Nov 616.50 dn 22.50 Jan 625.80 dn 20.70
