By Jade Markus and Phil Franz-Warkentin, Commodity News Service Canada
ICE Futures Canada canola ended higher on Monday, underpinned by gains in Chicago Board of Trade soybeans and soy oil.
CBOT soybeans and soy oil advanced despite large production numbers from the United States Department of Agriculture, as strong demand estimates kept prices above key support levels.
Overnight advances in Malaysian palm oil furthered canola’s gains.
Traders say the canola market has strong underlying support, which is bullish.
However, ideas that demand for Canadian canola from China could be dramatically lower this year, as the country is set to enforce new dockage rules, had a bearish effect on prices.
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As of September 1, China is expected to only allow one per cent of organic waste material in canola, compared with the previously allowed 2.5 per cent.
About 16,536 canola contracts traded on Monday, which compares with Friday when 15,631 contracts changed hands. Spreading accounted for about 964 of the contracts traded.
Durum and barley futures were all untraded and unchanged, while milling wheat was revised higher after the close.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade were up by 13 to 27 cents per bushel on Monday, as solid demand expectations were enough to counter last week’s bearish USDA production estimates.
While the USDA is forecasting record large US soybean yields, that news has been factored into the futures and attention now is on the rising demand projections.
Ideas that actual production may not live up to the USDA estimate contributed to the gains, according to participants.
Chart-based activity was another feature, with Friday’s relatively firm close seen as bullish from a technical standpoint.
SOYOIL futures were up on Monday, as a rally in crude oil provided some spillover support. A decline in US soyoil stocks in the monthly report from the National Oilseed Producers Association was also supportive.
SOYMEAL futures were up on Monday.
CORN futures in Chicago were up by two to four cents per bushel on Monday, with the rally in soybeans providing some spillover support.
Speculators were noted buyers, as prices recovered off of the contract lows hit last week. Solid weekly export inspections were also somewhat supportive.
WHEAT futures in Chicago were steady to down eight cents per bushel on Monday, as world wheat supplies remain large overall despite last week’s slight downgrade from the USDA.
Rising production estimates out of Eastern Europe and the Black Sea region were also bearish.
However, weather related harvest delays did help prop up the front months in the Minneapolis spring wheat market, which was somewhat supportive for the Chicago futures as well.
Weakness in the US dollar index also helped temper the declines in wheat.
