Week in Review
Canola remains under pressure as the combo of its exclusion from 45Z plus trade wars with BOTH the U.S. and China continue to obliterate the market.
May futures lost another 13% last week, bringing cumulative losses near 18% in just 3 weeks’ time.
The collapse in canola continues to pressure soybean oil, down 4.2% last week and, like canola, down more than 14% in three weeks’ time.
Some of the losses in oil can be attributed to ‘strength’ (I use that word lightly) in meal as Argentina strike season gets underway.
Oilseed workers/port worker strikes are commonplace in Argentina, especially during harvest months.
Strikes generally give the meal market a boost as Argentina is the largest meal exporter in the world.
When strikes loom, Argentine export offers are pulled and can leave the world scrambling for a hot minute, supporting the board.
To be fair - Argentina is also the largest soybean oil exporter in the world, but Argentine meal is traditionally MAJOR driver in the overall soy complex.
Ready… set… strike!
Fast forward 18 hours and the government intervened, although some workers went ahead with it:
The commencement of Argentine strike season in combination with losses in oil left oilshare flirting with 40% - a level we have not seen since the weeks and days before 45Z guidance was finally released the second week of January.
Soybeans couldn’t escape the pressure in oil, falling 25 cents combined the first three days of the week before recovering Thur and Fri to finish down 9 cents on the week:
Nearby futures are up 5 cents year-to-date in dollars, but DOWN the equivalent of 75 cents in BRL due to the Brazilian real’s 7.7% appreciation vs the dollar so far this year:
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