North American grain/oilseed review: Canola at two-month highs
By Phil Franz-Warkentin
Glacier FarmMedia MarketsFarm — The ICE Futures canola market was stronger on Thursday, settling at its highest levels in two months as speculative short-covering provided support.
Malaysian palm oil futures touched fresh contract highs in overnight activity, with European rapeseed and Chicago soyoil also stronger. However, losses in soybeans put some pressure on the canola market.
Uncertainty over the size of Canada’s canola crop, amid mixed yield reports as harvest operations progress across the Prairies, provided additional support. Saskatchewan’s weekly crop report pegged average canola yields in the province at 33 bushels per acre, which would be well short of the 38.4 bu./ac. average yields for the country projected by Statistics Canada.
There were an estimated 69,075 contracts traded on Thursday, which compares with Wednesday when 57,212 contracts traded. Spreading accounted for 36,598 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Thursday, as the advancing United States harvest countered the supportive influence of rising world vegetable oil markets.
Reports that the European Union was considering delaying anti-deforestation laws for another year were especially bearish for soybeans, as the regulations would have limited some Brazilian soybean exports and shifted more demand to the U.S.
Early yield reports for the U.S. soybean crop look reasonably favourable, with rains in the forecast for dry parts of Brazil also weighing on prices.
Weekly U.S. soybean export sales of 1.44 million tonnes were in line with trade expectations, but still the lowest level of the past three weeks.
CORN was pressured by the good U.S. harvest weather, with profit-taking after values hit three-month highs contributing to the declines.
Forecasts call for relatively warm and dry conditions across the Corn Belt for the next two weeks, which should allow farmers to make good harvest progress.
Weekly U.S. corn export sales were solid, topping trade average trade guesses at about 1.7 million tonnes.
Strikes at ports along the U.S. East Coast and Gulf of Mexico continued to be monitored closely.
WHEAT corrected lower, as traders took profits amid ideas the recent rally in wheat was starting to look overdone.
Weekly U.S. wheat export sales came in above trade estimates, at 443,000 tonnes.
Declining production and export projections out of Russia, as drought conditions are thought to be hurting their next winter wheat crop, continued to underpin the wheat market.
