North American Grain/Oilseed Review: Canola up with drought concerns

WINNIPEG, Aug. 5 (MarketsFarm) – The ICE Futures canola market was stronger on Thursday, hitting its highest levels of the past week.

Drought concerns across Western Canada remained supportive, with the size of the crop likely well below earlier expectations. However, actual yields remain to be seen and market participants are showing uncertainty over where prices will need to go to ration enough demand.

There is a chance of precipitation in some areas over the weekend, although the moisture is likely too little, too late and could cause harvest delays as harvest operations start up.

Gains in Chicago Board of Trade soybean futures provided some support. However, soyoil was weaker and the Canadian dollar was stronger, cutting into crush margins.

About 11,807 canola contracts traded on Thursday, which compares with Wednesday when 20,917 contracts changed hands. Spreading accounted for 7,218 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade held onto small gains on Thursday after trading in a wide range.

Mixed Midwestern weather forecasts kept some caution in the soybean market. While there is some more rain in the nearby models, the extent of the coverage remains to be seen.

Weekly United States soybean export sales were in line with expectations, at about 440,000 tonnes of old and new crop business combined.

The U.S. Department of Agriculture also announced an additional 300,000 tonnes of business to unknown destinations this morning.

Soymeal was also higher on the day, but soyoil posted large losses as the product spreads saw some adjustment.

CORN was underpinned by solid export demand, but held range-bound overall.

Weekly U.S. corn export sales topped trade expectations, at about 900,000 tonnes of old and new crop business combined.

The USDA releases updated supply/demand estimates next week, and pre-report positioning was a feature.

WHEAT was mixed on the day, holding relatively steady after seeing some wide price moves earlier in the week.

Weekly U.S. wheat export sales at just over 300,000 tonnes were solid, but at the lower end of expectations.

Declining production estimates out of Russia were somewhat supportive, with the state of the North American spring wheat crop also underpinning the futures.

However, seasonal harvest pressure on the other side weighed on prices.

The Western Producer

Tags: canola, soybeans, CBOT, futures