North American grain/oilseed review: Canola weaker Wednesday after choppy day
By Phil Franz-Warkentin
Glacier FarmMedia | MarketsFarm — The ICE Futures canola market was weaker on Wednesday, retreating from earlier gains after running into chart resistance.
Strength in the Canadian dollar following the latest interest rate announcement from the Bank of Canada accounted for some of the relative weakness in canola, with the currency at fresh eight-month highs relative to its United States counterpart. A stronger Canadian dollar cuts into crush margins and makes exports more expensive for international buyers.
A firmer tone in the Chicago soy complex provided some underlying support. Tight old crop supplies and production uncertainty for the new crop also underpinned the canola market.
There were 39,928 contracts traded on Wednesday, which compares with Tuesday when 50,401 contracts changed hands. Spreading accounted for 22,728 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade strengthened Wednesday, with optimism over looming talks between Donald Trump and Chinese President Xi Jinping encouraged some buying.
However, relatively favourable crop weather kept a lid on the upside, with little concern in the nearby forecasts.
Softening export demand, as cheaper South American supplies enter export channels, also weighed on values.
CORN was also up despite good U.S. crop conditions, with speculative positioning behind some of the activity.
Weekly U.S. ethanol data showed production of the renewable fuel at 1.105 million barrels per day in the week ended May 30. That was up by 49,000 barrels per day from the previous week.
WHEAT futures were up across the board, with dryness in China and the escalating Russia/Ukraine conflict providing support.
Heat and dryness have cut into production prospects in some major Chinese wheat growing regions, which could cause the country to increase imports.
Meanwhile, wheat movement through the Black Sea is facing questions, as Ukraine and Russia increase attacks on each other.
