By Marlo Glass, MarketsFarm
WINNIPEG, Jan. 28 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished higher on Tuesday, recovering slightly after sharp losses incurred yesterday.
One trader noted that spreading activity indicated that there is a large amount of canola in the system, with the widening July/November suggesting that there will be high carryout from the 2019 growing season.
Rebounding soyoil on the Chicago Board of Trade provided some support to canola values, though one trader remarked that prices remained “heavy.”
Relative strength to the Canadian dollar also weighed on prices. At midday, the dollar was around 75.88 U.S. cents.
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On Tuesday, 39,790 contracts were traded, which compares with Monday when 35,462 contracts changed hands. Spreading accounted for 29,822 contracts traded.
SOYBEAN futures at the Chicago Board of Trade (CBOT) were lower on Tuesday, continuing pricing trends set yesterday.
Malaysian palm oil prices are down by about 18 per cent from January highs, putting pressure on comparable vegetable oils.
Brazil’s soybean harvest is about 4 per cent complete, which is trailing behind the 13 per cent pace from this time last year. Market participants will be watching for signs of drought in key soybean-growing seasons during this harvest period, to see if the record-high crop is realized.
CORN futures finished higher today, boosted by steady export demand.
This morning, the United States Department of Agriculture (USDA) announced a private export sale of approximately 124,000 tonnes of corn, purchased by Mexico. That continues a steady string of daily sales announcements which started last week.
However, the future of ethanol demand in the U.S. remains uncertain. Last week, a court decision struck down three biofuel waivers that were granted to oil refineries by the Environmental Protection Agency (EPA). The court decision has sparked doubts regarding the legitimacy of other exemptions the EPA has granted.
Under the U.S. Renewable Fuel Standard, oil refineries must blend biofuels such as ethanol into fuel. However, waivers can be granted if compliance to this rule causes undue financial stress. The volume of waivers granted by the EPA has nearly quadrupled in recent years.
WHEAT futures were lower on Tuesday.
In India, wheat planting has totalled approximately 73.4 million acres, which is up from the 64.9 million acres planted last year. Early estimates for India’s wheat crop are around 109 million tonnes.
Unseasonably warm growing temperatures in western and central Europe have left winter wheat crops growing slower than normal, according to the European Union’s crop monitoring agency. Warmer temperatures have also prevented some cereal crops from developing tolerance for low temperatures, making crops in the region more vulnerable to frost.
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