North American grain/oilseed review: Canola climbs higher

The ICE Futures canola market was up sharply on Friday, hitting fresh contract highs as bullish chart signals kept speculators on the buy side.

Gains in Chicago Board of Trade soybeans contributed to the firmer tone, although soyoil was softer on the day and the Canadian oilseed outpaced the United States market to the upside.

While there are some ideas that canola is looking overpriced, Canada’s tight supply situation remained a supportive influence from a fundamental standpoint.

Strength in the Canadian dollar, which was up by roughly half of a cent relative to its U.S. counterpart, put some pressure on values.

About 20,913 canola contracts traded on Friday, which compares with Thursday when 17,885 contracts changed hands. Spreading accounted for 10,990 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade started the day on the defensive on Friday, but the early selling subsided and the market settled with solid gains.

South American weather worries were a major supportive influence, with hot and dry forecasts for Argentina and southern Brazil raising concerns over the yield prospects there.

Brazil’s AgRural lowered their estimate for the size of the country’s soybean crop by 11.3 million tonnes, now estimating production at 133.4 million tonnes. While that would still be large, it would no longer be a new record as some had anticipated earlier in the growing season.

The United States Department of Agriculture announced private export sales this morning of 102,000 tonnes of soybeans to unknown destinations.

Soyoil was softer on the day, putting some pressure on beans. The oil/meal spreads saw some adjustment in favour of the meal side of the equation on Friday.

CORN held closer to unchanged for most of the session, finishing slightly higher.

The USDA announced private export sales of 176,000 tonnes of corn to Mexico this morning.

The adverse South American weather was also supportive for corn.
The USDA’s monthly supply/demand report will be released next week Wednesday, and pre-report positioning likely accounted for some of the activity.

WHEAT was mixed, seeing some consolidation after posting large losses in recent days.

Damage was done from a chart standpoint over the past week, keeping some pressure on values.

A lack of export demand for U.S. wheat also weighed on prices, although declining condition ratings for U.S. winter wheat were somewhat supportive.

The Western Producer

Tags: prices, soybean futures, corn futures, soyoil, canola market, wheat futures