By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Dec. 4 – ICE Futures Canada canola contracts were mixed on Friday, as a rally in CBOT soyoil was enough to counter a surprisingly bearish Statistics Canada production report.
In a report out this morning StatsCan pegged this year’s Canadian canola crop at 17.2 million tonnes, which was well above average trade guesses that were closer to 15.5 million; and the second largest crop ever.
The surprising headline number initially sent canola prices down by as much as eight dollars per tonne, but a rally in CBOT soyoil helped canola recover off its lows. Continued weakness in the Canadian dollar also provided some support, and canola crush margins improved by as much as C$10 per tonne on the day.
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Ideas that solid exporter and domestic crusher demand will be able to eat into the larger canola supplies were also supportive, according to participants.
About 54,708 canola contracts were traded on Friday, which compares with Thursday when 33,266 contracts changed hands. Spreading accounted for 42,350 of the contracts traded. The November 2016 contract was up by over nine dollars on the day, with the narrowing in of the old/new crop spread a feature of the spread activity.
Milling wheat, durum, and barley were all untraded, although prices were revised after the close.
SOYBEAN futures at the Chicago Board of Trade closed seven to eight and a half cents per bushel higher on Friday as the United States Department of Agriculture (USDA) reported strong overnight sales.
US exporters sold 427,000 tonnes within the last 24 hours, according to the USDA.
The news indicates strong demand for the oilseed, which is bullish.
SOYOIL prices settled stronger on Friday, tracking Malaysian palm oil, which gained throughout the day, analysts said.
SOYMEAL closed weaker on Friday.
CORN futures ended three and a half to six cents per bushel stronger on Friday, supported by investor short-covering.
Farmers have not been selling their stocks into the market because they do not like current prices, analysts say, which also provided support.
The expectation of a smaller corn crop from Brazil added to the bullish tone.
WHEAT finished four to six and a half cents per bushel stronger on Friday, also supported by investor short covering, though some market watchers say rising prices could work against the commodity.
Lower prices could make US wheat more competitive globally, especially in the midst of a global supply glut.
– Australia’s west coast wheat production is expected to drop by close to four per cent due to weather conditions, according to an export group within the country.
– South Africa plans on increasing duties on imported wheat.
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