By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Aug. 6 (MarketsFarm) – The ICE Futures canola market was stronger on Friday, as a move back above the 20-day moving average was supportive from a chart standpoint.
Ongoing concerns over tight supplies and the need to ration demand remained the major bullish influence in the futures.
While the forecasts are calling for more moderate temperatures and a chance of rain across the Prairies over the next week, yields were hurt by the drought conditions earlier in the growing season with the better weather now unlikely to alter the production prospects greatly. A return to heat and dryness is expected in the longer-range outlooks.
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Gains in Chicago Board of Trade soybeans and a softer tone in the Canadian dollar were also supportive.
However, ideas that canola may be overpriced at these levels kept a lid on the upside with the November contract unable to break back above the psychological C$900 per tonne mark.
About 10,623 canola contracts traded on Friday, which compares with Thursday when 11,807 contracts changed hands. Spreading accounted for 4,094 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Friday, with chart-based positioning ahead of the weekend a feature.
The nearby Midwestern forecasts are calling for widespread rains, that if realized, would be coming at a key time for the development of the United States soybean crop.
Updated U.S. yield estimates will be released by the U.S. Department of Agriculture on Aug. 12, and market opinions are divided on whether or not the yields will be up or down from July forecast.
The USDA announced private export sales of 131,000 tonnes of soybeans to China this morning.
CORN also saw some positioning ahead of next week’s USDA supply/demand report, with the futures settling narrowly mixed.
Midwestern weather was another factor in the corn market. An estimated 37 per cent of the U.S. corn crop is dealing with some level of drought and traders are waiting to see how much rain falls over the weekend.
The Brazilian corn harvest is moving forward, with production estimates out of the country being lowered due to a combination of adverse growing conditions and untimely frost.
WHEAT was stronger across the board, but holding rangebound overall after a choppy week.
Production issues in a number of wheat growing regions of the world, including the drought in North American spring wheat areas and excessive moisture in parts of Europe, provided support. France’s wheat harvest is about two-thirds done, according to reports out of the country, well behind the 97 per cent average for this time of year.
