By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Sept. 18 (MarketsFarm) – The ICE Futures canola market Canola settled narrowly mixed on Friday, with losses in the front months and gains in the more deferred positions as contracts saw some consolidation after rallying for most of the past month.
Seasonal harvest pressure also weighed on values, with forecasts generally calling for favourable weather over the weekend.
However, gains in Chicago Board of Trade soybeans and soyoil remained supportive. The overall uptrend also remains intact, making any profit-taking corrections a good buying opportunity.
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About 37,456 canola contracts traded on Friday, which compares with Thursday when 33,284 contracts changed hands. Spreading accounted for 28,054 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade hit fresh two-year highs on the back of continued Chinese demand
The United States Department of Agriculture announced a 132,000 tonne sale to China this morning, marking the tenth daily sale to the country in a row. An additional 100,000 tonne sale to other unknown destinations was also announced this morning.
China’s pig herd is recovering from the African swine fever faster than expected, and the country is looking to increase its feed supplies. A need to meet trade commitments with the U.S. added to the buying interest.
Ideas that dryness in South America may see some intended soybean acres switch to corn instead in Argentina were also supportive.
CORN futures were at their best levels in six months, as China has also been in the market for U.S. corn lately. Rallies in soybeans and wheat were also supportive.
However, relatively favourable U.S. crop weather tempered the upside, with the harvest starting to get underway in southern regions. Concerns over demand from the ethanol sector amid the COVID-19 pandemic also put some pressure on corn values.
WHEAT futures saw a continuation of Thursday’s rally, with speculative buying taking prices to their best levels since March.
Strength in the Russian wheat market was reportedly spilling over to the U.S. futures, as active Russian sales recently were starting to make U.S. exports look more competitive.
The Buenos Aires Grain Exchange estimates that about 12 per cent of Argentina’s wheat crop is dealing with extreme drought, cutting into the yield prospects in the country.
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