North American grain/oilseed review: Canola up Thursday

By Phil Franz-Warkentin

Glacier FarmMedia | MarketsFarm — The ICE Futures canola market was stronger on Thursday, with chart-based buying and spillover from soybeans providing support.

Tight old crop supplies and production uncertainty for the new crop contributed to the gains. However, losses in soyoil and a firm tone in the Canadian dollar put some pressure on values.

Canola also ran into technical resistance, as the nearby July contract failed to hold above C$700 per tonne for the third session in a row after testing the level in early trade.

Canola crush margins have deteriorated in recent weeks, which a trader said was a sign the market was likely overpriced at current levels.

There were 40,707 contracts traded on Thursday, which compares with Wednesday when 39,928 contracts changed hands. Spreading accounted for 22,380 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, as a phone call between United States President Donald Trump and Chinese President Xi Jinping raised optimism over improved trade relations between the two countries.

Trump posted to social media that the call “resulted in a very positive conclusion for both countries.”

Weekly U.S. soybean export sales came in at the lower end of trade expectations, at just under 200,000 tonnes of new crop business.

Relatively favourable U.S. crop weather also kept a lid on the upside, with little concern in the nearby forecasts.

CORN was also underpinned by the call between China and the U.S., while the lack of any major weather threats tempered the advances.

The U.S. reported weekly corn export sales of about 942,000 tonnes, which was in line with trade expectations.

WHEAT futures were mixed, although the bias was higher in most contracts. Dryness concerns in China and the escalating Russia/Ukraine conflict remained supportive.

Weekly U.S. wheat export sales included net reductions of 49,000 tonnes of old crop business, with new crop sales at the low end of trade expectations at 445,000 tonnes.