There’s not a lot of green on the screen this morning, the odd grain out is US hard red winter wheat futures at Chicago. In general wheat futures in the US didn’t fair too badly. Soft red winter wheat and spring wheat were both lower but 2c/bu to 3c/bu lower isn’t a lot in real terms, and could easily be absorbed by stronger basis here. Soybeans at Chicago ran up double digit losses on the nearby contracts. The weakness in beans flowed through to an already shell shocked Winnipeg canola market, and helped drag Paris rapeseed futures lower.
Attached is a chart for average canola cash prices out of SE Saskatchewan, the chart emphasises the sudden decline in values over the last few days. Looking at Canadian canola and converting current values to a C&F value France tends to indicate two things. One that Canadian values are cheap, and are already more than competitive into the EU market. Canadian canola is cheaper than both Aussie and Ukraine offerings into the EU market. The second thing it tells me is that Ukraine and Aussie values are very similar in price into the French market. Both origins being roughly US$20- US$25 above the value of the Canadian product.
At today’s values out of the Pacific Northwest using China as a destination when you compare Aussie canola to Canadian, we see that the Aussie product is now priced some US$35.00 higher than the Canadian product. An irrelevant conversion given the current Chinese tariffs, but shows the tariff possibly working to the Australian traders benefit. Ukraine canola delivered Chinese port is roughly US$90.00 higher than the Australian estimate, possibly indicating that there is no pressure on the Aussie product as long as it is working into China. That’s the million dollar question. Unfortunately for Australian traders the Chinese market has not been buying Aussie canola. The EU continues to be the largest customer taking roughly 1.7mt to date. There is 604kt of canola nominated to yet to be named destinations. We may need to see China appear as a consumer before we get too excited about the impact these Canadian tariffs may have on canola for 2025-26 though. Prior to tariffs, and Chinese import policy changes, China imported just over 6mt of Canadian canola.