North American Grains/Oilseed Review – Canola firms with short-covering

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Published: September 16, 2016

By Dave Sims, Commodity News Service Canada

Winnipeg, September 16 – THE ICE Futures Canada canola market settled slightly higher on Friday, as traders covered shorts before the weekend and rainy weather delayed harvest efforts across the Canadian Prairies.

The Canadian dollar was about a third of a cent lower, relative to its US counterpart, which made canola more attractive to foreign buyers.

Gains in the US soy complex were supportive for values.

A market analyst in Winnipeg said canola was unlikely to break out of its range in the near future.

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“So C$445 to C$475 (per tonne) is our range right now but as harvest progresses there will be hedge pressure,” he said.

Uncertainty over the future of Canadian canola exports to China was also a factor weighing on traders’ minds, although next week’s visit to Canada by the Chinese Premier was viewed with optimism by some industry watchers who feel an agreement over dockage allowances (on Canadian canola imports) could be on the way.

Harvest pressure limited the advances along with the glut of oilseeds in the market.

Around 15,629 canola contracts were traded on Friday, which compares with Thursday when around 11,025 contracts changed hands. Spreading accounted for about 6,184 of the contracts traded.

Milling wheat, barley and durum were untraded and unchanged.

Settlement prices are in Canadian dollars per metric tonne.

Corn futures on the Chicago Board of Trade advanced seven cents per bushel on weather issues and reports of disease on Friday.

Showers are expected to fall over the US Midwest over the next 7 to 10 days, which could delay fieldwork.

As well, the corn market is getting spillover support from soybeans while traders covered shorts before the weekend.

Cases of diplodia fungus and ear-rot seem to be increasing slightly in Indiana and other states, according to reports.

Soybean futures on the Chicago Board of Trade were up 14 to 15 cents as rain swept across large growing areas in the US.

Heavy rains in Iowa and much of the US plains are expected to be problems for maturing soybeans, which was supportive on the charts.

The market was also still correcting higher after plunging earlier in the week.

August soybean crush numbers were mostly below analysts’ expectations. According to the National Oilseed Processors Association, crushers processed 131.9 million bushels in August. That compares to the 143.7 million soybeans that were crushed in July.

Soyoil finished lower, with spreading against soymeal a feature.

SOYMEAL futures finished higher tracking soybeans.

Wheat took strength from corn and soybeans and technical trading.

According to the USDA wheat exports are running 21 percent ahead of last year’s pace.

Rallies are expected to be short-lived for the next few days, according to an analyst.

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