By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 1 (CNS Canada) – ICE Futures canola contracts settled with small gains on Friday, as end-of-the-week positioning helped the market move higher for the first time in five days.
Optimism over improving trade relations between the United States and China gave the soybean market in Chicago a boost on Friday, with some of that buying interest spilling into canola.
However, continued strength in the Canadian dollar put some pressure on values. Ample visible supplies in the commercial pipeline and losses in Chicago soyoil also tempered the upside.
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Statistics Canada will release its latest stocks report next week Tuesday, showing grain and oilseed supplies in the country as of Dec. 31. The numbers should help confirm earlier production estimates while also providing a sense of usage to date.
About 17,697 canola contracts traded on Friday, which compares with Thursday when 20,659 contracts changed hands. Spreading accounted for 9,186 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Friday amid increasing optimism over trade relations between the United States and China. Negotiations this week reportedly led to a promise from China that it would buy another five million tonnes of U.S. soybeans.
However, soybeans settled well off their session highs, as traders await confirmation of actual business beyond the headlines.
While weather concerns in parts of Brazil were also supportive, the advancing harvest in the South American country did serve to keep a lid on the upside.
CORN futures were also supported by the trade optimism on Friday.
While corn was not mentioned specifically, there are ideas that China could also start buying more U.S. corn if trade relations improve.
Gains in the ethanol market today also provided some spillover support for the renewable-fuel-linked grain.
WHEAT futures were also up on the day, with the largest gains in the Kansas City hard red winter contracts.
Concerns over winterkill in parts of the Midwest following this week’s cold weather provided some support.
However, updated forecasts out of Russia predicting a large wheat crop there next year were somewhat bearish. Consulting agency SovEcon estimated Russia’s 2019 wheat production at 80 million tonnes. That would be up from an earlier forecast and well above the official government estimate of 67 million tonnes.
