North American grain/oilseed review: Canola hits highest levels since July

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm — The ICE Futures canola market saw a continuation of Wednesday’s rally on Thursday, hitting its highest levels in three-and-a-half months.

Spillover from outside markets contributed to the gains, with Malaysian palm oil, Chicago soyoil and European rapeseed all rising sharply on the day.

Solid export demand and uncertainty over the size of Canada’s canola crop also underpinned the futures, with end users thought to be front loading their purchases in the face of tightening supplies later in the marketing year.

However, fears over possible Chinese tariffs on Canadian canola remained a bearish influence.

There were an estimated 65,433 contracts traded on Thursday, which compares with Wednesday when 55,763 contracts traded. Spreading accounted for 42,024 of the contracts traded.

SOYBEAN at the Chicago Board of Trade futures strengthened with world vegetable oil markets on Thursday, hitting their highest levels of the past month.

Weekly U.S. soybean export sales of two million tonnes came in at the high end of trade expectations. Weekly soyoil sales were also solid, reaching the largest weekly total in 12 years at 114,311 tonnes.

While policies proposed by U.S. President-elect Donald Trump could lead to a trade war with China and cut into U.S. soybean exports, any dispute is unlikely to influence the current market and export customers were thought to be increasing purchases ahead of Trump’s inauguration in January.

The U.S. Department of Agriculture’s monthly supply/demand estimates will be released Friday, with the trade divided on whether soybean ending stocks projections will be revised up or down from the October report.

CORN moved higher in sympathy with soybeans, although losses in wheat tempered the upside.

Weekly U.S. corn export sales topped trade guesses at 2.766 million tonnes, with an additional flash sale of 120,000 tonnes to unknown destinations also reported.

WHEAT was weaker across the board, as improving moisture conditions across the U.S. Plains and more precipitation in the forecasts weighed on prices.

Weekly U.S. wheat export sales of about 375,000 tonnes were in line with trade guesses, but the lowest level of the past six weeks.