By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 10 (MarketsFarm) – The ICE Futures canola market was stronger on Monday, moving above some key technical levels as gains in outside markets provided support.
Chicago soyoil, European rapeseed and Malaysian palm oil futures were all higher on the day, with tightening palm oil stocks behind some of the strength in world vegetable oil markets.
The November contract climbed above its 200-day moving average, with the settlement above the psychological C$780 per tonne level setting the stage for a test of the next resistance at C$800.
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Weather concerns in parts of Western Canada were also supportive, with many areas of the Prairies still in need of more precipitation.
About 36,384 canola contracts traded on Monday, which compares with Friday when 20,482 contracts changed hands. Spreading accounted for 17,010 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade posted solid gains on Monday, with positioning ahead of Wednesday’s monthly United States Department of Agriculture monthly supply/demand report behind some of the activity.
With a much smaller acreage base than earlier expectations reported at the end of June, Wednesday’s report will likely include a sizeable cut to U.S. soybean production and stocks.
In addition, while much of the Corn Belt received some precipitation over the weekend, the coverage was spotty and more moisture will be needed. Longer range forecasts look hot and dry into the last half of July, which contributed to the rally in soybeans.
Tightening palm oil supplies were also supportive for world vegetable oil markets in general.
CORN was also underpinned by the hot and dry forecasts and the likelihood of declining condition ratings.
U.S. corn production may also be revised lower on Wednesday, despite the increased planted area to the crop from earlier intentions, as most market participants expect yields will be revised lower.
The advancing Brazilian harvest tempered the upside in corn, although harvest progress in the country is running behind the year ago pace.
WHEAT was mixed, with gains in Minneapolis spring wheat and losses in the winter wheats.
Spring wheat was underpinned by concerns over the state of the crop in the northern U.S. and Canada, while the advancing U.S. winter wheat harvest weighed on those contracts despite yield concerns.
The looming expiry of the agreement allowing Ukrainian grain to move through the Black Sea continued to overhang the wheat market, with still no deal in place to extend the agreement ahead of its expiry a week from now.
