Canola prices fell another 2% under pressure from the threat of a halt to trade talks between the US and Canada, losing almost 9% for the week

On Friday, President Trump announced the immediate end of all trade negotiations with Canada and threatened new tariffs after Canada announced a 3% digital income tax on American technology companies.

This added pressure to Canadian canola futures, which fell 2% on the day and 8.9% on the week.

Canada’s finance ministry later announced the repeal of a digital services tax that was aimed at American technology companies in order to advance trade talks with the US and have time to agree on a deal by July 21, when previously announced tariffs would take effect.

July canola futures fell 2% to CAD 683/t or $ 500/t on Friday, losing 8.9% for the week (-4% for the month), and November futures fell 2.4% to CAD 693/t (-7.2% for the week).

It should be noted that November futures are trading higher than July futures, which indicates traders’ hopes for a settlement of trade relations and a recovery in demand for canola oil from the US biofuel sector.

Weather in the Canadian prairies remains favorable for canola planting, with additional precipitation forecast next week, continuing to improve canola and spring wheat crop potential.

Falling canola prices continue to put pressure on rapeseed prices in Europe, with August rapeseed futures on the Paris exchange down 6.6% to €474/t or $555/t in the week, down 2.4% in the month. The premium on November futures rose to €12.5/t over August futures.

The strengthening of the euro and Canadian dollar against the US dollar keeps the price in dollars at a high level, which supports export demand prices for rapeseed in Ukraine at $530-540/t or UAH 25,000-25,500/t with delivery to ports.

Markets await data on crop areas in the US and Canada, which will have the biggest impact on markets this week.

Tags: prices, rapeseed