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ICE Canada Weekly Outlook: Canola Facing Uncertainty

Winnipeg, MB, June 13, 2018 (CNS Canada), Jun 13, 2018 (Commodity News Service Canada, Inc. via COMTEX) --

ICE Futures Canada canola contracts fell to their lowest levels in more than three months during the week ended June 13, but could still have more room to the downside given the general sense of global trade uncertainty.

"Every commodity trader in North America or globally is scared
to death right now," said Errol Anderson, of Pro Market
Communications in Calgary. If the United States goes through
with imposing tariffs on China as early as Friday, June 15,
"that's very bad news," as China would retaliate with its own
tariffs, he added.
With soybeans already moving lower, Anderson expected increased
trade tensions would see beans drop below US$9.25 per bushel,
with November canola possibly breaking below C$500 per tonne.
A move by the U.S. Federal Reserve to raise interest rates on
June 13 could weigh on the Canadian dollar, especially as the
Bank of Canada is not expected to be raising rates any time
soon. A softer domestic currency could provide support for
canola, but "when you get right down to it, soybeans are more
important than the Canadian dollar," said Anderson.
He said recent rains across Western Canada had also boosted the
yield potential in many areas, limiting the potential for a
weather-related rally.
However, soybeans are oversold and a recovery in the oilseeds is
possible if the trade tensions ease, according to Anderson.
"It's all about trade, and it's all about (U.S. President
Donald) Trump," said Anderson. "Trump is a bull in the china
shop right now . . . which is not good news for canola prices
either."

Phil Franz-Warkentin, Commodity News Service Canada

Copyright 2018 Commodity News Service Canada, Inc.

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