North American grain/oilseed review: Canola up for first time this week

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market posted solid gains on Thursday, moving higher for the first time this week amid ideas the recent losses were looking overdone.

Speculative buying was a feature, as prices bounced off major support. Gains in the Chicago soy complex contributed to the firmer tone, with European rapeseed and Malaysian palm oil futures also stronger on Thursday.

Relatively favourable Prairie weather conditions kept a lid on the upside, while large old crop supplies were also still overhanging the canola market.

There were an estimated 88,262 contracts traded on Thursday, which compares with Wednesday when 66,036 contracts traded. Spreading accounted for 54,432 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were underpinned by chart-based buying on Thursday, as the market saw a technical correction after dropping below trend-line support earlier in the week. Gains in soyoil and meal contributed to the buying interest, with proposed changes to Brazil’s tax laws said to be behind some of the strength in the products.

The Brazilian government is introducing tighter rules on industry tax credits to close loopholes in the country’s system, although exporters said the adjustments could reduce Brazil’s competitiveness on the global market and open the door for more North American sales of grains and oilseeds.

Weekly United States soybean export sales came in at the lower end of trade expectations, with about 190,000 tonnes of old crop business and an additional 74,000 tonnes of new crop sales.

Labour unions in Argentina announced a 48-hour strike Thursday, although no major disruptions to movement were reported yet.

CORN was underpinned by solid export demand, with 1.2 million tonnes of old crop sales reported by the U.S. Department of Agriculture and an additional 113,000 tonnes of new crop.

The USDA also announced additional flash sales of 152,000 tonnes of corn to unknown destinations.

Supportive chart signals contributed to the gains in corn, although relatively favourable Midwestern weather tempered the upside.

WHEAT futures were mixed despite the ongoing production concerns out of Russia.

Weekly U.S. wheat export sales came in above trade guesses, with 617,000 tonnes of new crop business going on the books.

Farmers in Ukraine have reportedly finished planting their spring crops.