By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Sept. 2 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, hitting the highest levels for the front month contract in nearly two years.
In addition to the bullish chart signals, a rally in Chicago Board of Trade soyoil also provided some spillover support.
Positioning ahead of Friday’s Statistics Canada stocks report accounted for some of the activity. While average trade estimates had placed ending stocks for the 2019/20 crop year at around 2.1 million tonnes, an upward revision to that year’s production in a report out earlier this week was generally seen as a sign that stocks will also be higher, according to a broker.
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Uncertainty over the size of the 2020/21 crop also kept some caution in the market, with the canola harvest still in its early stages.
About 28,803 canola contracts traded on Wednesday, which compares with Tuesday when 30,359 contracts changed hands. Spreading accounted for 13,456 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, recovering from earlier losses as a rally in soyoil provided some support.
Dryness concerns across parts of the Midwest contributed to the gains, with yields likely hurt by the lack of moisture.
Oilseed processors in the United States crushed 184.5 million bushels of soybeans in July, according to the latest Fats and Oils report, which marked a new record for the month. However, soyoil stocks tightened to 1.8 billion pounds, from 1.9 billion the previous month.
CORN futures were also supported by Midwestern weather concerns – although chart based profit taking and spillover from the losses in wheat limited any upside.
The USDA reported that 424 million bushels of corn were used to produce ethanol in July, which was up by nearly 50 million from June, but still off the year ago level.
Tightening Chinese corn supplies were boosting prices there, and raising expectations for increased US sales going forward
WHEAT futures were mixed, with a steady tone in Minneapolis spring wheat but losses in the winter wheats as traders took profits on recent gains.
Dryness concerns in some winter wheat growing regions remained somewhat supportive, with seeding in its early stages.
Talk of recent buying interest from China also tempered the declines, although confirmation of the demand was lacking.
