By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Sept. 20 (CNS Canada) – ICE Futures Canada canola contracts were up sharply on Tuesday, as a rally in Chicago Board of Trade soyoil provided spillover support.
The Canadian dollar was also slightly weaker and crush margins widened out to levels not seen in years, according to a broker. The wide crush margins are seen as a sign that canola remains cheap compared to other oilseeds, which accounted for some of the buying interest.
Speculative short covering contributed to the gains, while concerns over harvest delays in parts of Western Canada were also supportive, according to participants.
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However, Canada is still expected to have a large canola crop overall which limited the advances. Statistics Canada released updated production estimates this morning using satellite based modeling that placed the canola crop at 18.3 million tonnes. That’s up from the 17.0 million estimated in August using the traditional survey methodology, but in line with the year-ago level and still below what most industry participants expect for the final 2016/17 number.
About 37,311 canola contracts were traded on Tuesday, which compares with Monday when 19,780 contracts changed hands.
Milling wheat, durum, and barley were all untraded, although prices were revised after the close.
SOYBEAN futures at the Chicago Board of Trade closed 13 to 17 cents per bushel higher on Tuesday, propped up by strong global demand for the oilseed.
Sharp advances in the nearby Malaysian palm oil and Chicago Board of Trade soy oil markets were also a feature.
Concerns that wet weather could hamper harvest and crop quality underpinned the market.
SOYOIL prices were higher on Tuesday, tracking advances in Malaysian palm oil.
SOYMEAL closed stronger on Tuesday.
CORN futures were two to three cents per bushel higher on Tuesday, as harvest is progressing slightly slower than average.
Nine per cent of corn has been harvested, compared with the 12 per cent five-year average, according to data out of the US.
However, gains in the US dollar and high global grain supplies tempered gains.
WHEAT closed one to two cents per bushel higher on Tuesday, propped up by increased demand from China.
China has needed to import more wheat as the country’s crop is in poor condition, market watchers say.
However, gains in the greenback put a lid on advances.
– Weekly wheat export inspections reached 562,000 metric tonnes, market watchers say.
– US winter wheat has been about 17 per cent seeded, according to reports out of the country.
END
