By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 6 (MarketsFarm) – The ICE Futures canola market was weaker on Friday, dropping in sympathy with outside vegetable oil markets. Speculative profit-taking ahead of the weekend added to the declines, although canola did manage to finish off its lows for the session.
Malaysian palm oil, European rapeseed and Chicago soyoil futures were all lower on the day.
The losses in canola came despite confirmation of the tight old crop stocks situation from Statistics Canada. Only 3.9 million tonnes of canola were on hand as of March 31, 2022, according to a report released Friday morning. That compares with 7.8 million tonnes last year and the five-year average of 9.3 million. The stocks were at the lower end of trade expectations.
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Weakness in the Canadian dollar, which neared its lowest level in four months relative to its United States counterpart, also provided some support.
About 15,747 canola contracts traded on Friday, which compares with Thursday when 15,153 contracts changed hands. Spreading accounted for 10,004 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Friday, as a broad selloff in global equity markets and a firmer tone in the United States dollar index was bearish for the grains and oilseeds in general.
Talk that Indonesia may lift its ban on palm oil exports in the next few weeks sparked sharp declines in palm oil, which spilled into the soy market.
Forecasts calling for warm and dry Midwestern weather over the next week were also bearish, as farmers should be able to make some progress with spring seeding.
Good export demand remained supportive, although no fresh flash sales were announced on Friday.
CORN was also pressured lower by the better U.S. seeding weather and general bearishness in the global financial markets.
Chart-based selling added to the declines, as prices dipped below nearby support.
Rains in parts of Brazil also weighed on values, helping improve the prospects for the second corn crop there.
WHEAT was narrowly mixed, seeing some consolidation after posting sharp gains on Thursday.
Excessive heat hurting wheat production in India remained supportive, although the U.S. winter wheat crop likely saw some improvement from rains earlier this week.
Spring wheat seeding is finally moving forward in the northern U.S. Plains, but the progress remains well behind normal.
Canadian wheat stocks as of March 31 came in at 10.1 million tonnes, which was at the lower end of trade guesses and about six million tonnes below last year’s level.
