WINNIPEG – The ICE Futures canola market was stronger on Wednesday, posting gains for the first time in over a week after uncovering support to the downside.
Gains in outside markets provided spillover support, with Chicago soyoil, European rapeseed and Malaysian palm oil all higher.
Domestic crush margins remain wide, bringing in some buying interest. However, Canadian canola is expensive on the export market, tempering demand on that front.
Statistics Canada is set to release updated production estimates on Thursday. The government agency pegged the crop at 17.6 million tonnes in its August report, which compares with the year-ago level of 18.7 million tonnes.
Read Also
Canadian Financial Close: Loonie, TSX rise ahead of Labour Day
Glacier FarmMedia — The Canadian dollar ended the week with its highest close in a month. The loonie closed at…
About 44,930 canola contracts traded on Wednesday, which compares with Tuesday when 43,951 contracts changed hands. Spreading accounted for 26,068 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, seeing a correction after yesterday’s declines. Sharp gains in soyoil were countered by losses in soymeal.
While United States soybean production was at the higher end of trade estimates in Tuesday’s U.S. Department of Agriculture supply/demand report, at 4.15 billion bushels, the soybean numbers were still generally bullish overall. Ending stocks were forecast to tighten to only 220 million bushels by the end of the 2023/24 marketing year, which would be the smallest carryout in eight years.
Tuesday’s report also included calls for a reduction in U.S. soybean oil production, which contributed to the gains in soyoil futures – as demand for the vegetable oil is expected to remain strong.
CORN futures were higher, amid ideas yesterday’s losses were overdone.
An increase in U.S. harvested corn area more than countered a reduction in yields, causing the USDA to up its call for U.S. corn production to a record 15.134 billion bushels in Tuesday’s report. However, there are ideas that actual yields may be revised lower in subsequent reports, due to hot and dry conditions.
Weekly US ethanol data saw production of the renewable fuel increase slightly on the week, to 103.9 million barrels per day, with stocks down by nearly half a million barrels at 21.2 million barrels.
WHEAT futures were higher across the board, extending Tuesday’s gains.
World wheat carryout was dropped by seven million tonnes by the USDA on Tuesday, now at 258.6 million tonnes, due primarily to production losses in Australia, Canada, Argentina and the European Union.
Updated Canadian wheat production estimates will be followed closely in Thursday’s Statistics Canada report. The USDA estimated Canada’s wheat crop at 31.0 million tonnes in Tuesday’s report, which compares with Statistics Canada’s August estimate of 29.5 million tonnes and the year-ago level of 34.3 million tonnes.
