By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Dec. 3 (CNS Canada) – ICE Futures canola contracts were stronger on Monday, as sharp gains in Chicago Board of Trade soyoil and soybean contracts provided spillover support.
The United States markets strengthened on news that the U.S. and China had reached a trade truce over the weekend. While there was little concrete information beyond an agreement to delay additional tariffs for 90 days, tweets from U.S. President Donald Trump were enough to support soybeans, with some of that buying interest spilling into canola.
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However, the activity in the financial markets also caused the Canadian dollar to climb higher relative to its U.S. counterpart. The rising currency weighed on crush margins and limited the upside in canola.
Large visible supplies and a lack of significant end user demand put some pressure on values.
Statistics Canada releases its latest production estimates on Thursday, Dec. 3, and pre-report positioning accounted for some of the activity.
About 24,661 canola contracts traded, which compares with Friday when 16,623 contracts changed hands. Spreading accounted for 15,698 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Monday, as news of a temporary trade truce between the United States and China provided support.
China will reportedly be buying agricultural products from the U.S., but whether or not that translates into a substantial increase in soybean exports remains to be seen.
Large South American crop prospects tempered the upside in soybeans, as cheaper soybeans from Brazil and Argentina continue to compete with U.S. supplies.
CORN futures were also boosted by the trade optimism. There were ideas that China could buy some more U.S. sorghum, which would underpin corn as well.
However, ongoing concerns over the African swine fever in China and the possibility of reduced feed demand in the country tempered the advances.
WHEAT futures were stronger on the day, seeing some follow-through buying interest after Friday’s advances.
U.S. wheat exports have shown some improvement lately, with the latest inspections data showing export inspections of nearly half-a-million tonnes in the past week.
Declining production estimates out of Australia were also supportive.
However, Russia continues to be active on the world export market which was seen as limiting the upside in the futures.
