North American Grain/Oilseed Review: Canola hits one-week highs following soyoil

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Published: September 19, 2016

By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada

WINNIPEG, Sept. 19 (CNS Canada) – ICE Futures Canada canola contracts were up on Monday, hitting their highest levels in a week as gains in outside vegetable oil markets provided support.

Malaysian palm oil and Chicago Board of Trade soyoil contracts were both up sharply, which helped boost canola crush margins as well.

Uncertain North American harvest prospects, with adverse weather causing delays in both the US Midwest and Canadian Prairies, provided further support.

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Optimism that Canada may be able to reach an agreement on dockage allowances with China this week contributed to the gains, according to participants.

However, this year’s Canadian canola crop is still expected to be large overall. Statistics Canada releases updated model-based production estimates on Tuesday, which may provide some nearby market direction.

About 19,780 canola contracts were traded on Monday, which compares with Friday when 15,629 contracts changed hands.

Milling wheat, durum, and barley were all untraded.

SOYBEAN futures at the Chicago Board of Trade closed six to eight cents per bushel higher on Monday, underpinned by advances in the nearby soy oil market.

Wet weather is expected for areas in the US Midwest, which could delay harvest progress and is bullish.

Dry weather is hindering seeding in parts of Brazil, analysts say, which added to the advances.

Weakness in the US dollar furthered gains, as it makes the country’s commodities more appealing to international buyers.

SOYOIL prices were higher on Monday, following overnight gains in Malaysian palm oil.

SOYMEAL closed weaker on Monday.

CORN futures were mostly unchanged on Monday, gathering spillover support from advances in the crude oil market.

Crude oil prices gained close to one per cent on Monday, which is bullish for corn, as it increases the likelihood that processors will blend above mandated amounts of the commodity into biofuel.

However, high global supplies kept a lid on advances.

WHEAT closed mostly unchanged to two cents per bushel weaker on Monday.

The front contract was supported by losses in the US dollar.

The ongoing Canadian wheat harvest, which is expected to be large, pressured far contracts.

– Egypt is tendering for wheat after receiving no offers on Friday’s tender, analysts say.

– Brazil’s Parana state is ten per cent finished its wheat harvest, according to reports out of the country.

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