North American Grain/Oilseed Review: New crop canola hits fresh highs

The ICE Futures canola market was stronger on Monday, with the largest gains in the deferred positions as the old/new crop spread narrowed in.

Strength in crude oil underpinned world vegetable oil markets on Monday, with gains in Chicago Board of Trade soyoil, European rapeseed and Malaysian palm oil all providing spillover support for canola.

Chart-based buying was a feature, with the new crop canola contracts hitting fresh highs while the front months ran into some profit-taking resistance.

Uncertainty over a labour dispute at Canadian Pacific Railway, and what it will mean for grain movement, kept some caution in the futures.

About 12,621 canola contracts traded on Monday, which compares with Friday when 10,645 contracts changed hands. Spreading accounted for 3,520 of the contracts traded.

The ongoing conflict in Ukraine accounted for much of the strength in WHEAT futures on Monday, with some Chicago soft wheat contracts posting limit-up gains at one point before running into resistance.

With no signs of a ceasefire in Ukraine anytime soon, exports out of the Black Sea region should remain at a standstill.

However, improving moisture prospects for the winter wheat crop in the United States did put some pressure on values, with forecasts calling for rains in the dry Southern Plains.

SOYBEANS were boosted by a rally in crude oil, with soyoil leading beans and meal higher as well.

Weekly U.S. export inspections showed just over half a million tonnes of soybeans were shipped during the week ended March 17, which was down from the previous week but up slightly from the same week a year ago. Total U.S. soybean exports to date were running 20 per cent behind the year ago pace.

A move by Argentina to raise export taxes on soyoil and soymeal was supportive, with both now at 33 per cent. Also, the Buenos Aires Grain Exchange lowered their forecast for Argentina’s soybean crop by 1.1 million tonnes, to 42 million.

CORN posted double digit gains, moving in sympathy with wheat and soybeans.

The gains in crude oil and concerns that Ukrainian farmers won’t be able to seed their corn crop accounted for much of the strength in the futures.

On the other side, Brazil’s second crop was reportedly getting some welcome moisture.

The Western Producer

Tags: Vegetable Oil, soybeans, soyoil, rapeseed, palm oil, futures, soymeal, markets, corn, canola