By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, June 1 (MarketsFarm) – The ICE Futures canola market was up sharply on Tuesday, boosted by weather concerns and spillover from the Chicago Board of Trade soy market.
Environment Canada has issued a heat wave alert for much of the Canadian Prairies, with daytime temperatures above 30 Celsius expected over the next week. With little rain in the forecast, there are concerns that the hot weather will exaggerate drought concerns across the region.
General strength in world vegetable oil markets, including a rally in CBOT soyoil, was also supportive.
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However, a firmer tone in the Canadian dollar put some pressure on values. A slowdown in commercial buying interest also kept the gains in check.
About 19,796 canola contracts traded on Tuesday, which compares with Monday when 2,925 contracts changed hands. Spreading accounted for 5,850 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were up sharply on Tuesday, as activity resumed after the Memorial Day long weekend.
Soybean seeding is thought to be nearing completion across the United States, with only about 10 per cent of intended acres left to go in the ground. That would be well ahead of average for this time of year due in part to the dry weather.
The first crop condition ratings of the growing season will be released by the U.S. Department of Agriculture later in the afternoon with the weekly report delayed due to Monday’s Memorial Day holiday.
A rally in crude oil was also supportive for soybeans, with increasing demand for biofuel underpinning the vegetable oil markets.
CORN was stronger, moving up its daily limit at one point before running into some profit-taking.
With only limited moisture in the Midwestern forecasts over the next few weeks, traders were building a weather premium into the market.
Declining crop prospects out of Brazil added to the gains, as the country’s second corn crop keeps being downgraded due to a lack of precipitation.
WHEAT futures were up sharply across the board, with the biggest gains in Minneapolis spring wheat.
While the spring wheat market was still trying to assess the damage caused by recent frosts, the forecasts are now turning hot and dry which will cause further stress for the crop.
