North American Grain/Oilseed Review: Canola hits new multi-year highs

WINNIPEG, Jan. 26 (MarketsFarm) – The ICE Futures canola market was stronger on Tuesday, hitting new multi-year highs in the front months before running into resistance.

The most active March contract was up by its C$30 per tonne daily limit at one point during the day, moving above C$700 per tonne in the front month for the first time since 2008.

The price activity was seen as a short-squeeze, with end users sitting on previously sold positions being forced to buy them back.

Meanwhile, speculators on the long-side of the market took the opportunity to book some profits as prices rose, keeping values well off their session highs by the close.

About 47,549 canola contracts traded on Tuesday, which compares with Monday when 33,534 contracts changed hands. Spreading accounted for 17,400 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were up sharply for the second straight day on Tuesday, as the market continued to recover its losses from the previous week.

Solid end user demand was behind much of the strength, with concerns over tightening supplies in the United States keeping both exporters and domestic crushers in the market to make sure they’re covered.

However, improving crop prospects in South America tempered the gains to some extent.

CORN was also boosted by good export demand. The United States Department of Agriculture reported a 1.36 million tonne sale of U.S. corn to China this morning, with an additional 102,800 tonnes sold to unknown destinations.

News that Ukraine was considering placing limits on corn exports, in an effort to shore up domestic supplies, also provided support.

However, relatively favourable South American weather conditions and rising production estimates out of the continent put some pressure on values.

WHEAT futures were higher across the board, taking some direction from the gains in the row crops.

Condition ratings in a number of key winter wheat growing states declined in the latest weekly USDA report, with the good-to-excellent rating in Kansas falling three points, to 43 per cent good-to-excellent.

Russian curbs on exports also remained supportive, although large production prospects out of Australia put some pressure on values.

The Western Producer

Tags: North American Grain and Oilseed Review