The crash in Chicago soybean futures on Monday, and the spill over impact it had on rapeseed and canola futures was almost forgotten last night. Winnipeg canola futures were sharply higher. The nearby contract closed +CAD$26.90 / tonne, the Jan 2027 slot closed at CAD$731.60, up CAD$28.00. Canola trading a range of CAD$702.80 to CAD$733.40. Paris rapeseed, although firmer, wasn’t as sharply higher as Winnipeg canola. Gains of €5.25/t nearby and +€6.50/t for the Feb27 slot, were much better to see than Mondays blood bath though.
Brazilian officials denied they have changed export standards for soybeans, of which it is questionable they existed in the first place, and will head to China to discuss quality issues next week. There has been a change to the way export Brazilian shipments are being inspected, this has lead to a decline in quality at the Chinese end apparently.
Trump confirmed the Xi / Trump meeting has been pushed out 5 – 6 weeks, now due in late April.
The foil hat side of town thinks that the sudden drop in soybeans should encourage China to but more US soybeans. A deal that they also expected to be announced after the Xi / Trump meeting, which is now deferred. Currently we see Brazilian soybeans valued at US$483.85/t C&F China, Argentine soybeans valued at US$476.50 C&F China, and US soybeans valued at US$523.15/t C&F China. The difference between the high and low there is US$46.65/t or 127USc/bu, the difference is just under double the decline on Monday. US / Brazil difference is US$39.30/t or 107c/bu. So unless Brazilian quality is deplorable, which it may well be considering their wet harvest, then US soybeans have a ways to go to be price competitive.
Sorry to dwell on beans (could have been crude oil) but the correlation to canola / rapeseed is generally close. Having Canadian canola bounce like it did last night is good for Australian sellers. The Canadian product is now roughly US$15.00 more expensive into the Chinese market. Chinese imports of Australian canola for N/D/J stand at just 185kt. The longer Aussie values remain competitive with Canadian product, the higher this number will go.