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ICE review: Canola corrects off nearby lows

| 2 min read

By Phil Franz-Warkentin

 

Glacier FarmMedia MarketsFarm — The ICE Futures canola market was stronger on Friday, recovering some of Thursday’s losses as gains in the Chicago soy complex provided spillover support.

Weakness in the Canadian dollar and gains in European rapeseed were also supportive, as canola remains attractively priced compared to most other oilseed markets.

Canada exported 203,000 tonnes of canola during the week ended Jan. 12, with crop-year-to-date exports of 4.9 million tonnes running 85 per cent ahead of the year-ago pace, according to Canadian Grain Commission data.

However, the fact canola was not included in interim rules on biofuel feedstock guidelines from the United States Department of Agriculture announced earlier in the week remained a bearish factor overhanging the market. Lingering uncertainty over possible U.S. tariffs on canola oil imports when Donald Trump takes office on Monday was another bearish influence.

There were an estimated 55,903 contracts traded on Friday, which compares with Thursday when 85,621 contracts traded. Spreading accounted for 34,598 of the contracts traded.

 

SOYBEAN futures at the Chicago Board of Trade were stronger on Friday, recovering some of Thursday’s losses as participants adjusted positions ahead of the long weekend. Markets in the United States will be closed Monday for Martin Luther King Jr. Day, while that day will also see Donald Trump inaugurated as the next U.S. President.

Fresh optimism over improved trade relations between the U.S. and China, contributed to the gains in soybeans, as Trump spoke with Chinese president Xi Jinping over the phone to discuss trade and other issues. Trump described the call as ‘very good’ on social media.

However, Trump has also promised to impose tariffs on ‘day one’ of his administration — keeping some caution in the market.

While weekend rains may alleviate some dryness concerns in Argentina, the forecasts are turning hotter and drier next week.

 

CORN futures were also boosted by positioning ahead of the weekend and the possibility of easing tensions with China, touching fresh highs on the back of speculative buying interest.

Condition ratings for Argentina’s corn crop are deteriorating, according to reports out of the country.

 

WHEAT was steady to higher, lagging corn and soybeans to the upside.

Strength in the U.S. dollar accounted for some of the relative weakness in wheat, as the rising currency makes U.S. exports less attractive for international buyers.