The ICE Futures canola market was weaker at Wednesday’s close, after an early move to fresh contract highs ran out of steam and profit-taking came forward to weigh on values.
Gains in crude oil and Chicago Board of Trade soyoil provided some initial spillover support for canola. European rapeseed futures also climbed above 1,000 euros per tonne for the first time ever. However, rapeseed was unable to hold onto those gains and the eventual downturn in that market pulled canola lower as well.
Ideas that canola was looking overpriced at current price levels were also bearish, although an analyst pointed out that domestic processors were still showing good demand.
The ongoing conflict in Ukraine remains a key driver of the grains and oilseeds, with sunflower acreage in the country likely down sharply on the year.
About 21,648 canola contracts traded on Wednesday, which compares with Tuesday when 20,422 contracts changed hands. Spreading accounted for 8,078 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, nearing their highest levels ever as a rally in soyoil provided support. The nearby May contract settled above US$17 per bushel, marking the first time since 2012 that the front month contract had settled above that level.
Solid export demand was supportive despite seasonal harvest pressure from South America, with declining production estimates out of Argentina and some logistics issues in the continent keeping buying interest focused on the United States for now.
However, expectations for an increase in U.S. soybean acres this year did put some pressure on values.
CORN was higher, although it lagged soybeans to the upside as losses in wheat pulled on the grain from the other side.
Ukraine’s corn crop is expected to be down sharply on the year. The country’s agriculture minister forecast area seeded to spring crops will be cut in half.
Weekly U.S. ethanol data showed that production of the renewable fuel hit a nine-week high in the latest reporting period, at 1.042 million barrels per day.
Seeding of Brazil’s second corn crop is nearing completion.
WHEAT initially moved higher, but that buying interest subsided and prices dropped below unchanged. Speculative selling was a feature.
Recent moisture in the Southern Plains accounted for some of the weakness.
However, the ongoing conflict in Ukraine remained supportive with exports out of the country down to a trickle.
