Soyoil rallies on Trump tariff plan, wheat rebounds
Trump tariffs on China, Canada may boost US soyoil use
Lower dollar and firmer crude oil also support grains
Wheat bounces on importer demand, short-covering
Updates at 1308 GMT, changes byline/dateline
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, Nov 26 (Reuters) -Chicago soyoil futures climbed 3% on Tuesday as U.S. President-elect Donald Trump's announcement of tariffs against major trading partners Canada and China raised the prospect of more domestic soyoil being used in biofuel, traders said.
Trump also promised tariffs against Mexico, a major export outlet for U.S. corn. Chicago corn futures were little changed as traders set the tariff news against a rebound in wheat.
Grain markets drew support from a bounce in crude oil LCOc1 and a drop in the dollar .DXY, which gave up early gains that followed Trump's tariff announcement.
Trump, who takes office on Jan. 20, said on Monday he would impose a 25% tariff on imports from Canada and Mexico until they clamped down on drugs and migrants crossing the border, while also outlining an additional 10% tariff on imports from China.
The move against Canadian imports caught grain markets off guard and created the possibility of some Canadian canola oil being replaced by U.S. soyoil as a feedstock for the growing renewable diesel sector.
"China tariffs have been in the pipeline but Canada is more of a surprise as it's a historic trading partner of the U.S.," a European trader said.
Canada and Mexico are part of a free-trade agreement with the United States, making the use of unilateral tariffs uncertain.
January soyoil BOF25 on the Chicago Board of Trade (CBOT) was up 3.4% at 42.72 cents per pound by 1308 GMT.
January canola RSF5 on ICE was down 1.4%.
Oilseed markets have been buffeted since Trump's election in early November as participants grapple with the possible impact of his trade and energy policies.
CBOT soybeans Sv1 added 0.3% to $9.88-1/4 a bushel, supported by the rally in byproduct soyoil which offset supply pressure from favourable crop conditions in South America.
CBOT corn Cv1 ticked down 0.2% to $4.32 a bushel while CBOT wheat Wv1 was up 1.2% at $5.62-1/4 a bushel.
Wheat came under pressure earlier from news that U.S. winter wheat crop conditions improved for a fourth straight week following timely rainfall across the Plains this month, according to aU.S. Department of Agriculture (USDA) report late on Monday.
But the easing in the dollar and a clutch of tenders by importers including Algeria lent some support. GRA/TEND
Some participants were covering short positions in the run-up to Thursday's Thanksgiving holiday, traders added.
Prices at 1308 GMT | |||
Last | Change | Pct Move | |
CBOT wheat Wv1 | 562.25 | 6.50 | 1.17 |
CBOT corn Cv1 | 432.00 | -1.00 | -0.23 |
CBOT soy Sv1 | 988.25 | 2.50 | 0.25 |
Paris wheat BL2Z4 | 217.25 | 3.00 | 1.40 |
Paris maize EMAc1 | 209.75 | 0.25 | 0.12 |
Paris rapeseed COMc1 | 517.00 | 2.75 | 0.53 |
WTI crude oil CLc1 | 69.26 | 0.32 | 0.46 |
Euro/dlr EUR= | 1.05 | 0.00 | 0.22 |
Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per metric ton | |||
Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Sumana Nandy, Sherry Jacob-Phillips and Shreya Biswas
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