North American Grain/Oilseed Review: Canola corrects higher

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Nov. 7 (CNS Canada) – ICE Futures canola contracts strengthened on Thursday, as the market recovered off of major chart support.

Speculators covering short positions and end users taking advantage of bargain prices accounted for some of the buying interest in canola, according to participants.

A slowdown in seasonal hedge pressure and gains in Chicago Board of Trade soyoil were also supportive.

However, CBOT soybeans were lower on the day, which put some pressure on canola. Strength in the Canadian dollar also tempered the upside.

About 11,997 canola contracts traded, which compares with Tuesday when 14,095 contracts changed hands. Spreading accounted for 7,092 of the contracts traded.

SOYBEAN futures were weaker on Wednesday, as reports of another African swine fever case in China weighed on prices. The possibility of a reduction in the country’s hog herd would cut into world demand for soymeal.

The United States Department of Agriculture releases its monthly supply/demand reports on Thursday, and positioning ahead of the data was a feature.

Average pre-report guesses are predicting a downward revision to this year’s U.S. soybean production, but ending stocks should still be revised higher due to expectations for reduced exports.

CORN futures were lower on the day. A report out of China’s CNGOIC raised production estimates over the past few years, with 2018 Chinese corn production now pegged at 259 million tonnes. That’s up by about 20 per cent from an earlier estimate.

The latest U.S. ethanol report showed production in the last week at 1.068 million barrels per day, which was up by 9,000 from the previous week. Stocks of the renewable fuel rose to 23.15 million barrels.

WHEAT futures were lower at the close, after trading to both sides of unchanged. Conflicting export numbers out of Russia led to some confusion, although total wheat exports out of the country are still generally expected to be large.

Tomorrow’s USDA report is expected to show a slight downward revision in world wheat stocks, which could provide some support.

Commodity Future Prices

Canola
updated 2018-11-06 17:00
Price Change
Nov475.900.00
Jan483.001.30
Mar490.701.30
May498.101.20

Prices are in Canadian dollars per metric ton

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