North American Grain/Oilseed Review: Middle East tension lifts canola, grains

Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange were lifted on Friday due to inflamed hostilities in the Middle East and speculation over biofuel blends in the United States.

Israel launched attacks on Iran on Thursday night, targeting the latter’s nuclear program. The heightened tension in the Middle East caused crude oil to gain nearly US$5 per barrel.

This morning, reports suggested that the U.S. Environmental Protection Agency had submitted new biofuel proposals, which included greater proportions than previously thought. An analyst said there would be greater demand for vegetable oils if these came to fruition. Chicago soyoil traded up its daily limit of three U.S. cents per pound.

European rapeseed and Malaysian palm oil were also higher.

At mid-afternoon, the Canadian dollar was up one-tenth of a U.S. cent compared to Thursday’s close.

There were 132,093 canola contracts traded on Friday, which compares with Thursday when 85,620 contracts changed hands. Spreading accounted for 86,298 of the contracts traded.

SOYBEAN futures soared on the Chicago Board of Trade on Friday. Rising crude oil prices from Israel’s attack on Iran and new biofuel proposals from the United States Environmental Protection Agency raised soyoil prices and spilled over.

The EPA released its renewable volume obligation (RVO) on Friday, proposing a limit of 5.61 billion gallons for biomass-produced diesel, larger than what analysts anticipated. The EPA is also looking to cut credits in half for imported feedstocks.

The U.S. National Oilseed Processors Association will release its May crush report on Monday, estimated by the trade to be 193.52 million bushels.

WHEAT caused prices to make posted double-digit gains on Friday, with speculative short-covering after the Israeli strikes on Iran behind some of the buying interest. Minneapolis spring wheat nearly matched its high for this month, while the Chicago soft and Kansas City hard red varieties recovered much of their losses from the past week.

FranceAgriMer reported the country’s soft wheat rating to be 70 per cent good to excellent, one point higher than last week and eight points higher than one year ago.

CORN posted small gains, despite the larger advances in soybeans and wheat.

The U.S. Corn Belt will see precipitation over the next week. Rains are forecast for the eastern regions as well as parts of Kansas and Missouri through Monday, while the Western Corn Belt through northern Illinois will receive rain in the middle of the week.