Glacier FarmMedia | MarketsFarm — Canola contracts on the ICE Futures platform fell sharply lower in early March, as broad import tariffs in the United States went into effect and Canada announced its own retaliatory measures.
Canola was already losing ground ahead of the implementation of 25 per cent U.S. import tariffs, and the futures fell to their weakest levels since mid-January when the persistent tariff threats from U.S. President Donald Trump finally came to fruition on March 4.
Charts look worrisome
The May canola contract fell below all its major moving averages in the immediate aftermath of the tariffs, and remained below the 20-, 50-, 100- and 200-day averages on March 5 despite seeing a modest correction.
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“We’re in a ‘risk off’ market right now,” said MarketsFarm analyst Mike Jubinville, adding that the move below the upward trend line in canola was “worrisome” from a technical standpoint.
Fundamentals still supportive
The underlying fundamentals of tightening supplies and the need to ration demand remain relatively supportive for canola and Jubinville expected the latest weakness could be seen as a buying opportunity by some end users.
However, he cautioned that “there’s only one story at work right now, and it’s politics.”
