By Dave Sims, Commodity News Service Canada
Winnipeg, August 7 (CNS Canada) – Canola contracts on the ICE futures platform posted large gains on Tuesday, following gains in Chicago Board of Trade soyoil and benefiting from a weaker Canadian dollar.
The market was underpinned by a heat wave in Western Canada this week, which is expected to stress canola plants.
Speculative buying was a feature of the day and canola enjoyed spillover gains from soybeans.
Traders were also positioning themselves ahead of Friday’s supply and demand estimates from the United States Department of Agriculture.
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On the other side, futures were encountering some technical resistance and global trade tensions threw some uncertainty into the market.
About 13,113 canola contracts traded, which compares with Friday when 4,996 contracts changed hands. Canola futures didn’t trade Monday due to a civic holiday in Canada. Spreading accounted for 1,742 of the contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Soybean futures on the Chicago Board of Trade corrected higher Tuesday in the wake of Monday’s losses.
Just 67 per cent of the crop in the United States is now rated good to excellent, which is down three per cent from last week.
Demand for U.S. livestock feed is expected to decline, which weighed on soymeal. China has indicated it will start using alternative foodstuffs in its hog feed.
The corn market ended close to unchanged in technical trade.
The U.S. corn crop is progressing at a faster rate than normal, which dragged on prices.
Corn production in the U.S. is expected to fall this year, according to analysts. Some have pegged this year’s crop at 14.4 billion bushels, which compares to last year’s crop of 14.6 million.
Corn yields in the U.S. were forecast at 176.3 bushels an acre, which was down slightly from last year’s figure of 176.6 bushels an acre.
Chicago wheat futures softened on ideas the market was overbought.
The U.S. spring wheat crop saw its condition rating fall on Monday. Just 74 per cent of the crop is considered good to excellent, down six per cent from the week before.
Dry weather in Europe and the Black Sea region continues to support values.
