North American Grain/Oilseed Review: Canola corrects lower in front months

WINNIPEG, Feb. 24 (MarketsFarm) – The ICE Futures canola market mixed on Wednesday, with losses in the most active front months as speculators booked profits on their large net long positions.

Strength in the Canadian dollar, which hit three-year highs relative to its United States counterpart, also weighed on values.

However, a rally in Chicago Board of Trade soyoil provided spillover support for canola and new crop months held onto gains.

Tight old crop supplies and the need to ration demand going forward remained a supportive influence as well, although a broker noted that end-user demand was backing away at current price levels.

About 45,254 canola contracts traded on Wednesday, which compares with Tuesday when 37,950 contracts changed hands. Spreading accounted for 19,914 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, boosted by South American weather concerns.

Heavy rains in Brazil were the driver in the soy market, causing delays to the soybean harvest there. With more precipitation in the forecast, the lack of export movement out of the country is keeping end user buying interest focused on the dwindling supplies of soybeans in the United States.

However, while the harvest has been slow in Brazil, production is still expected to be large overall when the crop eventually comes off. Some analysts out of the country now predict a 136 million tonne soybean crop, which would be up by three million from the U.S. Department of Agriculture’s current forecast.

CORN futures were up with soybeans, although chart resistance held to the upside.

The slow Brazilian soybean harvest has also delayed seeding of the Safrinha second corn crop in the country, which is planted after the soybeans come off.

U.S. ethanol production was down by 28 per cent the past week at only 658,000 barrels per day, according to the latest data from the Department of Energy, as the cold snap led to closures and slowdowns at some plants.

WHEAT futures were stronger, bouncing back after yesterday’s losses.

Wheat traders are still trying to get a better sense of the damage caused by last week’s cold snap that hit the U.S. Plains.

A number of tenders in the global market were seen as supportive for wheat.

The Western Producer

Tags: Brazil, soybean futures, South America, ethanol production, rains