North American Grain/Oilseed Review: Canola bounces higher

WINNIPEG, Jan. 25 (MarketsFarm) – The ICE Futures canola market posted solid gains on Monday, with the largest advances in the front months as the futures saw a corrective bounce after last week’s downturn.

Gains in the Chicago Board of Trade soy complex and weakness in the Canadian dollar contributed to the firmer tone in canola.

Chart-based buying was a feature, with some stops likely hit on the way up. The underlying fundamentals also remain supportive, given the ongoing concerns over tightening old crop supplies.

However, the new crop months lagged the front months to the upside as the latest strength in the canola market should encourage acres this spring.

About 33,534 canola contracts traded on Monday, which compares with Friday when 33,604 contracts changed hands. Spreading accounted for 20,334 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were up sharply on Monday, as Friday’s losses attracted end-user bargain hunting to start the week.

Lingering uncertainty over South American production also remained supportive, although recent rains in Brazil and Argentina have improved the crop prospects in the continent to some extent.

Weekly soybean export inspections reported by the United States Department of Agriculture were down slightly on the week, but still well ahead of what moved during the same week a year ago. Total U.S. soybean exports during the crop year to date of 45.2 million tonnes are up by 20 million from the same time last year.

CORN was also due for a correction after last week’s losses, with the gains in soybeans providing spillover support as well.

Weekly U.S. corn export inspections of 1.4 million tonnes were up on both the week and year-ago levels, with the total corn export pace to-date running 85 per cent ahead of the year ago pace.

WHEAT futures were higher across the board, as speculative fund money flowed into all of the grains and oilseeds.

Weekly U.S. wheat export inspections of about 524,000 tonnes were nearly double what was shipped the previous week, although year-to-date shipments are still running slightly behind the previous year’s pace.

The recent move by Russia to back away from the export market remained somewhat supportive. However, that news is largely priced into the futures for the time being.

Russian forecasters SovEcon upped their projection for the upcoming wheat crop in the country by 900,000 tonnes, to 77.7 million tonnes, due in part to good snow cover.

The Western Producer

Tags: North American Grain and Oilseed Review, canola prices