North American grain/oilseed review: Canola climbs higher Wednesday
By Phil Franz-Warkentin
Glacier FarmMedia | MarketsFarm — The ICE Futures canola market climbed higher on Wednesday, boosted by weakness in the Canadian dollar and gains in outside markets.
The United States dollar was sharply higher in reaction to the re-election of Donald Trump, with the resulting weakness in the Canadian dollar boosting crush margins and making exports more attractive to international buyers.
However, Trump’s win also kept some caution in the grains and oilseeds, as his proposed import tariffs would likely lead to retaliatory action against U.S. soybean and corn exports.
Gains in Malaysian palm oil, European rapeseed and Chicago soyoil futures also helped pull the canola market higher.
There were an estimated 55,763 contracts traded on Wednesday, which compares with Tuesday when 37,823 contracts traded. Spreading accounted for 32,998 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade recovered from overnight losses to settle mixed as markets in the United States reacted to the presidential election results.
Stock markets and the U.S. dollar moved higher on the news that Republican Donald Trump had retook the White House, while agricultural commodities initially came under pressure before recovering.
Soybeans had dropped amid concerns that Trump’s win would restart a trade war with China. However, any U.S. tariffs or Chinese retaliation likely take until next crop year to become an issue. End users buying the dips were thought to be behind some of the eventual strength.
The U.S. soybean harvest is nearly complete, with attention turning to Brazil where improving moisture conditions have allowed farmers to make good progress seeding their next crop.
The U.S. Department of Agriculture’s monthly supply/demand estimates will be released Friday, with average trade guesses calling for upward revisions to the U.S. soybean crop.
CORN remained supported by solid exports on Wednesday, although no fresh business was announced today.
Weekly U.S. ethanol data showed production of the renewable fuel at 1.105 million barrels per day in the last week, which was up from the previous week and just short of a new record. Stocks came in at just over 22 million barrels.
An upward revision to the U.S. corn crop is also expected in Friday’s report.
WHEAT was mixed in choppy trade, with a steady tone in Chicago soft wheat and losses in the hard red wheat contracts. Strength in the U.S. dollar was especially bearish for wheat, as the rising currency cuts into export demand.
