Glacier FarmMedia — The ICE Futures canola market was stronger on Wednesday, finding spillover support from gains in Chicago soybeans.
- Speculative short covering was a feature, with the settlement above C$650 per tonne in the March contract seen as constructive from a technical standpoint.
- Gains in European rapeseed and Malaysian palm oil provided additional support, although soyoil settled with small losses.
- Optimism over increased export movement to China underpinned the futures, with the country’s tariffs on Canadian canola set to drop in March.
- The Canadian dollar was slightly softer on the day, but still near 16-month highs relative to its United States counterpart.
- There were 45,542 contracts traded on Wednesday, which compares with Tuesday when 35,073 contracts changed hands. Intermonth spreading was a feature, accounting for 40,464 of the contracts traded.
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ICE canola supported, strengthens
Glacier FarmMedia – Canola futures on the Intercontinental Exchange continued to rally, fuelled by comparable oils. Chicago soyoil, European rapeseed…
SOYBEAN futures at the Chicago Board of Trade hit their highest levels in a month on Wednesday, as continued weakness in the United States dollar provided support.
- While the U.S. dollar saw a modest recovery off the four-year lows set on Tuesday, it remained soft overall with the weaker currency making exports more attractive for international buyers.
- A speech by Donald Trump in Iowa on Tuesday failed to include any major comments on biofuels aside from a claim that the administration “are very close to getting it done” on new guidelines.
- Hot and dry weather in Argentina was threatening soybean crops there.
- However, expectations for a record-large Brazilian crop tempered the upside as the harvest progresses in the South American country.
CORN futures were stronger, finding spillover support from the gains in soybeans and wheat.
- Ethanol production in the U.S. dipped by 5,000 barrels to 1.114 million barrels per day during the week ended Jan. 23, reported the Energy Information Administration. Stocks of the renewable fuel were4 down by 339,000 barrels at 25.4 million barrels.
- Trump expressed support for the year-round sale of E15 ethanol blended gasoline while in Iowa on Tuesday.
WHEAT futures posted solid gains, as traders continued to consider the damage to winter wheat crops from the recent storm that hit the U.S. Plains.
- Speculators are holding large net short positions in wheat and were thought to be covering some of those bearish bets.
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