ICE Canola Midday: Production concerns hovering over market
Output likely lower than StatCan estimate
By Glen Hallick
Glacier Farm Media MarketsFarm – Intercontinental Exchange canola futures were higher at midday Thursday, although they stepped back from larger increases earlier.
An analyst stated few in the trade believe Canadian canola production for 2024/25 will reach the 18.98 million tonnes estimated by Statistics Canada. He estimated the crop could be as low as 18 million tonnes, which would cut heavily into the canola available for export.
On Monday, Agriculture and Agri-Food Canada released its October report which kept projected canola exports at 7.50 million tonnes. At the current pace, exports would come to 12 million tonnes.
“I think we do 7.5 million tonnes maximum,” the analyst warned, but cautioned he doesn’t want to “wave an overly bullish flag.”
The recent rally in canola has been attributed to export demand, including China, purchasing as much canola as they can. That’s not only to avoid any supply shortage but also before China takes any action against Canadian canola.
Chinese authorities are currently investigating allegations of canola dumping by Canada, with the findings to come within the next 12 months. The analyst suggested China could impose preliminary tariffs before the investigated is completed.
Canola was getting additional support from upticks in Chicago soyoil, Malaysian palm oil and most European rapeseed contracts. Declines in Chicago soybeans and soymeal tempered further gains in canola, while modest losses in crude oil weighed on the vegetable oil complex.
By late Thursday morning, the Canadian dollar was virtually unchanged at 72.22 U.S. cents.
Approximately 35,750 canola contracts were traded as of 10:40 am CDT, with prices in Canadian dollars per metric tonne:
Price Change Canola Nov 635.70 up 3.50 Jan 650.40 up 4.50 Mar 659.90 up 3.70 May 665.80 up 3.80
