By Phil Franz-Warkentin, MarketsFarm
Winnipeg, Aug. 28 (MarketsFarm) – The ICE Futures canola market settled with small gains on Wednesday, after trading to both sides of unchanged in choppy activity as the market reacted to Statistics Canada’s first survey-based production estimate of the crop year.
Statistics Canada pegged the 2019/20 canola crop at 18.45 million tonnes, which would be down by nearly two million tonnes from the previous year and at the lower end of market expectations.
The headline number gave an initial boost to the market, but the early buying interest quickly subsided amid expectations that actual production will be revised higher as conditions improved since the survey was conducted.
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The buying eventually returned to canola, with strength in the Chicago Board of Trade soy complex and weakness in the Canadian dollar behind some of the eventual gains.
About 14,021 canola contracts traded on Wednesday, which compares with Tuesday when 10,852 contracts changed hands. Spreading accounted for 5,182 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, taking back most of Tuesday’s losses as some support was uncovered to the downside.
Mixed Midwestern weather forecasts over the next week were somewhat supportive, with cooler temperatures expected to slow crop development. However, some much needed rain should also help yields.
Canada’s soybean crop was estimated at 6.2 million tonnes – a one million tonne drop from the previous year as yields and acres were down.
CORN was higher on the day, also recovering from earlier losses.
Canada’s corn crop was pegged at 13.6 million tonnes, which was down slightly from the previous year as increased acres mostly compensated for a reduction in average yields.
U.S. ethanol production increased to 1.038 million barrels per day in the latest weekly report, up by 15,000 barrels. However, stocks of the renewable fuel tightened by 385,000 barrels.
WHEAT futures were mostly lower on Wednesday, with the biggest losses in spring wheat.
Total Canadian wheat production for this year was forecast at 31.25 million tonnes by Statistics Canada, which would be down by a million tonnes from the previous year. Losses in durum and winter wheat accounted for all of the reduction, with spring wheat actually up by 1.2 million tonnes, to 25.1 million.
