North American Grain/Oilseed Review: Canola continues higher

The ICE Futures canola market was stronger on Wednesday, hitting contract highs for the second-straight session as gains in outside markets provided spillover support and bullish chart signals kept speculators adding to their long positions.

The Chicago Board of Trade soy complex, European rapeseed and Malaysian palm oil were all stronger. Improving crush margins also kept domestic processors showing solid demand.

However, some profit-taking came forward and canola finished off its highs for the session.

About 23,635 canola contracts traded on Wednesday, which compares with Tuesday when 26,577 contracts changed hands. Spreading accounted for 10,522 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade hit fresh contract highs on Wednesday, seeing a continuation of Tuesday’s rally.

The United States Department of Agriculture reported private export sales this morning of 132,000 tonnes of soybeans to China, marking the second large sale to the country of the past week.

Ongoing concerns over heat and dryness cutting into South American production were also supportive, despite recent rains.

CORN was also caught up in the broad buying interest, with spillover from soybeans and wheat pulling the grain higher as well.

The USDA is holding its annual outlook forum this week, with early acreage estimates from the government agency likely to be watched closely. U.S. corn area could be down on the year, given high soybean prices and fertilizer costs.

WHEAT posted solid gains, with the largest advances in the winter wheats as the spreads between the three wheat contracts saw some adjustment.

Declining condition ratings in a number of key U.S. wheat producing states contributed to the rally, with Kansas down four points in the good to excellent category, now at 26 per cent good to excellent. Oklahoma wheat was down seven points in the top quality categories, at only nine per cent good to excellent. Kansas crops were now 35 per cent poor to very poor, while 64 per cent of the wheat in Oklahoma was poor to very poor.

The longer range forecasts call for some moisture in the Southern Plains, which should help the situation improve.

The Russia/Ukraine situation remained at the forefront of the wheat market, as the two countries are major exporters.

The Western Producer

Tags: corn futures, rapeseed, palm oil, wheat futures, canola market, soybean futures