ICE canola correcting higher after initial tariff selloff

By Phil Franz-Warkentin

Glacier FarmMedia | MarketsFarm — The ICE Futures canola market was firmer at midday Wednesday, taking back some of Tuesday’s declines amid ideas the losses were overdone.

Tariffs imposed the United States sparked a broad selloff that weighed on most markets on Tuesday, including canola. However, there was talk in the trade on Wednesday that some sort of agreement may be reached between the U.S. and its trading partners.

Tightening canola supplies and the need to ration demand also remained supportive for canola, with Tuesday’s downturn likely seen as a buying opportunity by some end users.

However, Chicago soyoil was still pointed lower on Wednesday, with Malaysian palm oil and European rapeseed also weaker. Canola also fell below several key chart levels during Tuesday’s drop, which was bearish from a technical standpoint.

An estimated 42,200 canola contracts traded as of 10:49 CST.

Prices in Canadian dollars per metric tonne at 10:49 CST:

Canola            May   626.10    up  4.80

Jul   636.10    up  5.50

Nov   626.10    up  4.90

Jan   633.60    up  4.70