By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Aug. 25 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, seeing a continuation of Tuesday’s rally
Gains in Chicago soyoil and a weaker Canadian dollar helped underpin crush margins, which had dipped into negative territory earlier this week.
A move above C$900 per tonne in the November contract was supportive from a chart standpoint, which contributed to the gains.
Uncertainty ahead of Statistics Canada’s production estimates, set for release on Monday, Aug. 30, kept some caution in the market. Traders generally expect to see a decline in canola production compared to the 18.7 million tonnes grown in 2020, but the extent of the reduction remains to be seen with estimates ranging from 11.5 million to 16 million tonnes.
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About 21,566 canola contracts traded on Wednesday, which compares with Tuesday when 17,865 contracts changed hands. Spreading accounted for 13,722 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, although activity was thin and choppy, with no real substantial fresh news to provide direction.
The declining condition ratings reported earlier in the week remained supportive, although forecasts calling for rains to offset hot temperatures across the Midwest put some pressure on values. A lack of fresh export news also kept the gains in check.
General strength in world vegetable oil markets added to the firmer tone, with soyoil leading beans to the upside. Concerns over the COVID-19 Delta variant, and a possible downturn in energy demand, was behind some strength in crude oil, that spilled into the vegoil markets.
CORN was also remained supported by the declining condition ratings reported earlier in the week, with bullish chart signals adding to the gains.
However, forecasts calling for beneficial rain across the Midwest over the next week kept a lid on the upside- as the moisture should help crop development.
WHEAT ended with small losses in the most active contracts, after trading to both sides of unchanged.
Rain delays for the spring wheat harvest in the northern states and Canada provided some support, with production uncertainty in other wheat growing regions also supportive.
Germany’s agriculture ministry pegged that country’s wheat crop at 21 million tonnes, which would be down 3.5 per cent on the year. Production estimates out of France were also being revised lower, although the wheat crop there should still be up on the year after a drought hurt yields in 2020.
Average trade guesses ahead of next week’s Statistics Canada report call for wheat production to be down by at least six to seven million tonnes on the year.
