CNS Canada — The ICE Futures Canada canola market faces a slew of uncertainty as political turmoil in international trade markets and a looming report from Statistics Canada keeps traders guessing where the market is headed.

“The craziness of the White House is the main focus. How will it affect the markets?” said Keith Ferley of RBC Dominion Securities in Winnipeg.

November canola was at $528 a tonne on June 1, but at one point on Tuesday dropped to $500, underscoring how much pressure it’s under.

“Soybeans, wheat and corn all had a horrendous week and canola got sucked down because of that,” Ferley said.

An ongoing war of words and tariffs between China and the U.S. has cast a chill over agricultural markets in general, with some traders stepping to the sidelines.

According to Ferley, funds are on the short side of the market after the selloff earlier this week. The chart structure looks weak and he isn’t sure whether canola will be able to stage a rebound.

Still, there are positives from which canola is drawing strength.

“The Canadian dollar continues to slide,” he said. “There’s definitely been some Chinese buying in our market; whether it’s canola oil or seed, they’ve been picking away.”

Slow farmer selling has also underpinned the market.

Statistics Canada is scheduled to release its acreage estimates on June 29, which should give traders a good idea of how much canola has been planted.

“People may trade ahead of the acreage report,” said Ferley, “to try and even up positions.”

Weather conditions in Alberta and Saskatchewan are also drawing focus as persistent dryness is affecting several regions. Rain over the past week has helped alleviate some of those concerns, but more showers will be needed soon.

“The markets will be watching to see that everybody gets a little water here over the next week.”

— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.