Glacier FarmMedia — There’s more to canola futures on the Intercontinental Exchange than crude oil and vegetable oils prices, said David Derwin, commodity futures advisor for Ventum Financial in Winnipeg.
“Crude oil is going to be a big driver in this environment and therefore (soyoil), but there’s a lot of political stuff too,” Derwin said.
Along with the Middle East war, Derwin pointed to coming renewable fuel and biodiesel policies in the United States and the renegotiating of the Canada-U.S.-Mexico agreement.
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U.S. President Donald Trump is scheduled on March 27 to announce the latest renewable fuel proposals coming from the Environmental Protection Agency. Meanwhile the review process for CUSMA is already underway.
Derwin said it’s important to protect oneself from possible wide swings in canola, which could range from C$600 to C$800 per tonne.
“It’s more of what happens if it goes to either one of those places,” Derwin said. “You don’t want to lock in too much in case of production concerns. There’s some big swing potential here.”
Added to that is the forthcoming canola crop.
“We’re a little bit early where any kind of seeding concerns or weather-driven concerns come into play,” he said, emphasizing that could change in the coming weeks and months.
