By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, June 15 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Friday, seeing some follow-through buying interest after Thursday’s recovery off of nearby lows.
Weakness in the Canadian dollar, which lost about half a cent relative to its United States counterpart, contributed to the relative strength in canola.
Mounting trade tensions between the U.S. and China kept some caution in the grains and oilseeds following news that the U.S. was going forward with imposing tariffs on US$50 billion worth of Chinese goods. While it’s still uncertain how the back-and-forth tariffs will disrupt export movement, there are ideas that China may be looking to buy more Canadian canola at the expense of U.S. soybeans.
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Rainfall across parts of the Prairies overnight was generally beneficial for crop development, although the hail and heavy winds that hit some areas likely caused damage.
About 27,514 canola contracts traded, which compares with Thursday when 27,830 contracts changed hands. Spreading accounted for 18,596 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Friday, with concerns over the escalating trade war between the United States and China at the forefront.
Mexico was also reportedly considering tariffs of its own on U.S. soybeans and corn, which would be yet another blow to U.S. exports.
Relatively favourable Midwestern crop conditions added to the softer tone in beans, with the good weather and trade uncertainty keeping speculators firmly on the sell side.
U.S. oilseed processors crushed 163.5 million bushels of soybeans in May, according to a report from the National Oilseed Processors Association. That was a new record for the month, but still below average trade estimates.
CORN was down slightly on the day, but well off the contract lows hit in overnight activity as speculative short-covering came forward to provide support.
The lack of any weather threats in the nearby forecasts and the general sense of uncertainty on the global trade front kept the bias pointed down.
WHEAT futures were all lower, with seasonal harvest pressure behind some of the selling.
Declining production estimates out of Russia were somewhat supportive for wheat, but world supplies remain large overall.
Wheat traders were also following news that a strain of genetically modified wheat never approved for commercial production was found growing in Alberta. While the discovery is thought to be an isolated incident, Japan has already announced that it won’t be buying Canadian wheat until more details are known.
