North American grain/oilseed review: Canola corrects higher amid tariff uncertainty

By Phil Franz-Warkentin

Glacier FarmMedia | MarketsFarm — The ICE Futures canola market strengthened on Wednesday, as ideas Tuesday’s declines were overdone provided support.

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 an agreement may be reached between the U.S. and its trading partners.

Canadian Prime Minister Justin Trudeau spoke with U.S. President Donald Trump over the phone earlier in the day, discussing fentanyl and tariffs — although nothing concrete came from the call. Officials with both countries were expected to continue to speak with each other on Wednesday.

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

However, canola fell below several key chart levels during Tuesday’s drop, which was bearish from a technical standpoint.

There were 62,879 contracts traded on Wednesday, which compares with Tuesday when 73,961 contracts changed hands. Spreading accounted for 27,830 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, taking back some of yesterday’s losses amid ongoing tariff uncertainty.

After hitting two-month lows on Tuesday, the soy market was left open to a correction as the tariff concerns eased somewhat. However, the lack of any clear direction on the tariff front, as the Trump administration continued to put out conflicting statements, kept the market cautious overall.

The advancing Brazilian harvest and recent weather improvements in Argentina remained bearish, especially as more Chinese export demand is expected to shift away from the U.S. and towards South America.

CORN futures also saw a modest correction, although activity remained choppy amid the uncertain trade situation.

Expectations for increased U.S. corn acres this spring kept the gains in check.

WHEAT corrected off the nearby lows hit yesterday — also reacting to the shifting tariff news.

Russia’s wheat crop reportedly faired reasonably well over the winter, according to reports out of the country, although timely spring rains will still be needed.