North American Grain/Oilseed Review: Canola tops C$700 in front month

The ICE Futures canola market was stronger on Wednesday, with the largest gains in the nearby March contract as the front month settled well above C$700 per tonne for the first time since 2008.

Commercial traders sitting on short positions were reportedly being forced to pay up to exit those contracts, accounting for some of the strength. Solid demand from both exporters and domestic crushers is expected to lead to tight stocks going forward, and the market was working to ration that demand.

Weakness in the Canadian dollar and gains in Chicago Board of Trade soyoil futures provided additional spillover support.

However, overbought price sentiment put some pressure on values – especially in the more deferred positions.

About 28,890 canola contracts traded on Wednesday, which compares with Tuesday when 47,549 contracts changed hands. Spreading accounted for 17,880 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, underpinned by solid export demand and concerns over tightening supplies in the United States.

The U.S. Department of Agriculture reported private export sales of 132,000 tonnes of soybeans to China this morning and an additional 126,000 tonnes to unknown destinations.

Recent rains in South America were somewhat mixed for the futures. The moisture has alleviated dryness concerns, but could also delay early harvest operations in some parts of Brazil.

CORN was also underpinned by good export demand, but ran into chart resistance to hold relatively steady overall.

The USDA reported a 680,000 tonne sale of corn to China this morning, following up yesterday’s huge 1.36 million tonne sale.

U.S. ethanol production came in at 933,000 barrels per day in the latest weekly report, which was down by 12,000 barrels per day from the previous week. Supplies of the renewable fuel tightened slightly on the week, coming in at 23.6 million barrels.

WHEAT futures were lower on the day, taking back some of their recent gains.

Russia officially moved forward with imposing increased export tariffs, but that news was largely priced into the market for the time being.

The Western Producer

Tags: North America, Grain/Oilseed Review, canola