North American Grain/Oilseed Review: Canola settles near unchanged

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Oct. 11 (CNS Canada) – ICE Futures canola contracts finished near unchanged on Thursday, as bearish technical signals and improving harvest weather was countered by spillover support from advances in Chicago Board of Trade soybeans.

While cool and wet conditions continue to cause concerns across Western Canada, the forecasts are looking more favourable over the next week and farmers were making progress in some areas.

The latest weekly crop report out of Saskatchewan, released earlier in the day, pegged the canola harvest in the province at 61 per cent complete, which was up nine points from the previous week.

Chart-based selling also weighed on prices, as the nearby technical signals point lower for canola.

However, strength in CBOT soybeans provided some support, as traders reacted to the USDA’s latest production and stocks estimates.

About 19,308 canola contracts traded, which compares with Wednesday when 22,078 contracts changed hands. Spreading accounted for 11,774 of the contracts traded.

SOYBEAN futures were stronger on Thursday, as traders reacted to the United States Department of Agriculture’s latest production and stocks data.

The USDA raised its estimate for 2018/19 U.S. soybean yields slightly to while lowering its acreage number. The end result saw the overall forecast for U.S. soybean production revised lower by 3 million bushels, to 4.69 billion bushels. Ending stocks were revised higher, due to larger carryover supplies, but the total supply situation was not as bearish as traders had anticipated.

After moving lower in recent days, soybeans were due for a bounce and the lack of any overtly bearish data from the USDA provided the spark for the correction.

A rally in corn also provided spillover support for beans.

CORN futures posted solid gains, as the the USDA surprisingly lowered its corn yield estimate by 0.6 bushels per acre from September, pegging average yields at 180.7 bushels per acre. Total production was down by about 50 million bushels from the previous estimate, at 14.78 billion bushels.

Rain-related harvest delays in parts of the Midwest were also supportive.

WHEAT futures were lower. The USDA only made small adjustments to its wheat balance sheet, raising U.S. ending stocks by 21 million bushels, to 956 million, while lowering its world stocks projection by 1.1 million tonnes, to 260.18 million tonnes.

Production estimates for both Russia and Australia were revised lower, but the tighter world supply situation was expected and did little to support the futures.

Commodity Future Prices

Canola
updated 2018-10-11 13:19
Price Change
Nov496.50-0.30
Jan502.30-0.10
Mar508.200.00
May511.70-0.20

Prices are in Canadian dollars per metric ton

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