By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Aug. 26 (MarketsFarm) – The ICE Futures canola market was weaker at Thursday’s close, taking some direction from Chicago Board of Trade soyoil.
Positioning ahead of Statistics Canada’s survey-based production estimates, set for release on Aug. 30, accounted for much of the activity. Drought conditions during the growing season are expected to result in a crop well below 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.
Agriculture and Agri-Food Canada released their own supply/demand forecasts Thursday morning, pegging canola production for the year at 15.0 million tonnes. AAFC sees canola exports during the 2021/22 marketing year at 7.0 million tonnes, which would be well below the 10.9 million in 2020/21.
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The Canadian dollar was weaker on Thursday, providing some support for the futures.
About 14,898 canola contracts traded on Thursday, which compares with Wednesday when 21,566 contracts changed hands. Spreading accounted for 7,854 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were mostly weaker on Thursday, with only the nearby September contract higher as traders exited the front month ahead of its expiry.
Recent Midwestern rainfall and forecasts calling for relatively beneficial growing conditions over the next week helped take some of the weather premium that had built up out of the soybean market.
However, solid export demand provided some underlying support.
Weekly United States soybean export sales of over 1.8 million tonnes of old and new crop business combined were at the higher end of trade guesses.
The U.S. Department of Agriculture also announced private export sales this morning of 133,000 tonnes to China and an additional 132,000 tonnes to other unknown destinations.
CORN was narrowly mixed, posting small losses in the most active months.
Weekly new crop U.S. corn export sales of 684,000 tonnes were at the lower end of expectations, but the USDA also announced a 100,000 tonne sale to Colombia this morning.
Forecasts calling for beneficial weather the Midwest over the next accounted for much of the weakness in the futures, as the moisture should help crop development.
WHEAT was mostly higher, underpinned by supportive technical signals and declining world production estimates.
The International Grains Council released updated production estimates, lowering their forecast for the world wheat crop this marketing year to 782 million tonnes from 788 million. However, that would still be up from the 773 million tonnes grown in 2020/21.
Average trade guesses ahead of next week’s Statistics Canada report call for wheat production in the country to be down sharply from the 35.2 million tonnes grown the previous year.
Weekly U.S. wheat export sales hit a marketing year low, at 116,000 tonnes.
