Glacier FarmMedia — The ICE Futures canola market was mostly higher at Tuesday’s close, as speculative short covering and end-user bargain hunting provided support. However, a downturn in the Chicago soy complex tempered the upside.
- March canola settled right at its 20-day moving average, after climbing well above that level in early trade.
- Fund traders were thought to be covering some of their large net short position in canola, with exporter interest also believed to be coming forward amid ideas canola was starting to look cheap.
- However, the absence of Chinese buying remained a bearish influence.
- European rapeseed jumped higher for the second session in a row, providing spillover support.
- Chicago soybeans had moved higher in early activity as well but turned lower in sympathy with soyoil as the day progressed.
- Large supplies and expectations for burdensome carryout supplies tempered the upside. The March contract also ran into resistance around C$620 per tonne.
- There were 51,771 contracts traded on Tuesday, which compares with Monday when 38,105 contracts changed hands. Spreading accounted for 25,204 of the contracts traded.
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SOYBEAN futures at the Chicago Board of Trade were weaker Tuesday, taking back some of Monday’s advances after posting gains for most of the session.
- The United States Department of Agriculture reported flash sales of 336,000 tonnes of soybeans to China this morning. Traders estimated China bought as much as 600,000 tonnes of U.S. soybeans this week, with total purchases since the trade truce between the countries nearing 10 million tonnes.
- While China may have bought U.S. soybeans, most of that business has yet to be delivered with Chinese ports thought to be filled with Brazilian soybeans.
- Large South American production prospects weighed on values, with the Brazilian harvest in its early stages.
- Uncertain geopolitical tensions following the U.S. capture of Venezuelan President Nicolás Maduro kept some caution in the grains and oilseeds.
CORN futures were slightly softer, with positioning ahead of next week’s monthly supply/demand estimates from the U.S. Department of Agriculture behind some of the activity. Quarterly stocks data will be released in addition to updated production estimates.
- Pre-report trade guesses call for a downward revision to average corn yields in next week’s report.
- Export demand for U.S. corn remains relatively solid.
WHEAT futures were narrowly mixed Tuesday, with dryness in some U.S. winter wheat growing regions supporting hard red winter wheat futures.
- Chart-based positioning ahead of next week’s USDA report was a feature.
- However, large global supplies and the advancing harvest in the Southern Hemisphere weighed on values.
