Canola and soybean divergence — one is flat and the other is a falling knife

In a week that featured multiple major commodity market stories, the oilseed complex faced several variables pushing soybeans and canola in opposite directions. In the nearby month (July), canola was up 0.48% while soybeans fell 6.58% to lead all agricultural commodities lower.

On Thursday’s edition of RealAg Radio, Shaun Haney and Jon Driedger, FarmLink Marketing Solutions discussed several of the variables surrounding canola and soybeans.

The technicals and fundamentals:

  • From a fundamental perspective the soybean futures drop recently is likely over-done but that does not mean it stops here, says Driedger.
  • Crop conditions in the U.S. midwest are decent and the forecast is solid in the near term
  • The drop in the Canadian dollar has given canola some buoyancy in comparison to soybeans.
  • Dryness in the prairies has kept some weather premium in the canola market.

What to watch:

  • As the soybean price drops due to a tariff battle between the U.S. and China, there will be a price point that China will see a great entry point to make some purchases of U.S. beans.
  • Canola could see some benefits from soybean trade friction between the U.S. and China.
  • President Trump has promised further retaliatory tariffs up to $100 billion.
  • There is talk of OPEC expanding production, negative NAFTA sentiment and rising U.S. dollar index — all of these factors are bearish for the Canadian dollar, but good for Canadian commodity cash prices.

Get the full story from Shaun Haney and Jon Driedger, FarmLink Marketing Solutions by listening to the below audio clip.  

 

Shaun Haney

Shaun Haney is the founder of RealAgriculture.com. He creates content regularly and hosts RealAg Radio on Rural Radio 147 every weekday at 4:30 PM est. @shaunhaney

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