North American Grain/Oilseed Review: Canola rises in heavy spread trade

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Oct. 20 (CNS Canada) – ICE Futures Canada canola contracts settled higher on Friday, with intermonth spreading accounting for the bulk of the trade volume as participants exited the front month.

In the outright trade, improving crush margins provided some support. The Canadian dollar was down sharply relative to its U.S. counterpart, while Chicago Board of Trade soyoil moved higher.

Chart-based buying after Thursday’s move above nearby resistance added to the firmer tone in canola.

However, losses in CBOT soybeans tempered the upside potential in canola. Expectations that Alberta farmers will be able to complete the harvest before winter, despite persistent delays in some areas, also weighed on values.

About 48,908 canola contracts traded on Friday, which compares with Thursday when 26,459 contracts changed hands. Spreading accounted for 41,198 of the contracts traded.

Milling wheat, durum, and barley were all untraded, although prices were revised after the close.

Soybean futures at the Chicago Board of Trade were down on Friday, with seasonal harvest pressure accounting for some of the declines as Midwestern farmers reportedly made good progress over the past week.

Improving moisture conditions in Brazilian soybean growing regions were also bearish, although recent rainfall caused seeding delays in some areas.

The USDA reported a fresh sale of 198,000 tonnes of soybeans to China this morning.

Good Midwestern harvest weather also kept the bias pointed lower in corn, with chart-based selling adding to the declines as the December contract dropped to the lower edge of its nearby trading range.

The USDA reported sales this morning of 120,000 tonnes of corn to Spain, and an additional 125,000 tonnes to other unknown destinations.

Ample world supplies saw wheat futures move lower on Friday, as U.S. wheat continues to face stiff competition in the global export market.

Better seeding conditions for winter wheat in Europe also weighed on US prices.

Dryness concerns and declining crop prospects out of Australia were a bit supportive, but recent rainfall in parts of the country helped alleviate those concerns slightly.

Futures Prices as of October 20, 2017

Canola
2017-10-20 11:09
Price Change
Nov 501.6 0.40
Jan 509.5 0.90
Mar 514.9 1.90
May 517.2 1.80
Milling Wheat
2017-10-20 00:00
Price Change
Dec 232.00p 2.00
Mar 237.00p 1.00
May 243.00p 1.00
Jul 247.00p 1.00
Durum
2017-10-20 00:00
Price Change
Dec 279.00p 0.00
Mar 284.00p 0.00
May 286.00p 0.00
Jul 284.00p -1.00
New Barley
2017-10-20 00:00
Price Change
Dec 148.00p 0.00
Mar 151.00p 0.00
May 151.00p 0.00
Jul 151.00p 0.00

Prices are in Canadian dollars per metric ton

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