The ICE Futures canola market was stronger on Friday, seeing a modest correction to end the week amid ideas the recent losses were starting to look overdone.
Gains in Chicago soyoil and European rapeseed futures provided spillover support, although Malaysian palm oil was weaker on the day. Reports that Indonesia was considering removing a domestic sales requirement for palm oil exports accounted for some of the activity in that market, as the major palm oil producing country deals with rising inventories.
In Canada, relatively favourable crop conditions across the Prairies tempered the upside for canola.
Updated supply/demand estimates from Agriculture and Agri-Food Canada peg Canada’s 2022/23 canola crop at 18.4 million tonnes, which would be well above the previous year’s drought-stricken crop. However, ending stocks are still forecast to be tight at only 450,000 tonnes, from an anticipated 400,000 in 2021/22, as exports and the domestic crush should also increase.
About 17,191 canola contracts traded on Friday, which compares with Thursday when 18,993 contracts changed hands. Spreading accounted for 9,494 of the contracts traded.
WHEAT futures at the Chicago Board of trade were sharply weaker on Friday as news that Russia and Turkey had reached an agreement to open a corridor for Ukrainian grain shipments through the Black Sea sparked a selloff.
While there remains plenty of skepticism over how much, if any, grain will move the fact that a deal was signed was enough to weigh on wheat prices.
Ukraine is reportedly sitting on about 25 million tonnes of grain waiting to be exported.
Seasonal harvest pressure was also bearish, although export demand underneath the market provided some support as U.S. wheat is attractively priced on the world market.
The losses in wheat spilled over to pull CORN down as well, with bearish chart signals adding to the declines. Relatively favourable United States crop conditions were another bearish influence.
Argentina’s corn harvest was estimated to be about two-thirds complete, according to reports out of the country.
Gains in soybeans provided some support.
SOYBEANS were thought to be due for a correction after recent losses, with a rally in soyoil pulling beans up as well.
While there is some rain in the longer-range Midwestern forecasts, temperatures are expected to remain on the hot side – keeping some weather premiums in the market.
On Thursday, the International Grains Council lowered their forecast for world soybean production by four million tonnes to 390 million. However, if realized that would still be well ahead of the previous year’s 351 million tonne crop.
