By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 19 (CNS Canada) – ICE Futures Canada canola contracts were up sharply on Thursday, as speculative short-covering, solid end user demand, and weakness in the Canadian dollar all provided support.
A looming strike at Canadian Pacific Rail provided the catalyst for the speculative short-covering that drove canola higher, according to a broker. He said traders looking to exit the nearby May contract also exaggerated the price move.
Talk of increased export demand from China and concerns over a late seeding start in Western Canada were also supportive, although industry participants are still expecting to see record large Canadian canola acres this spring. Statistics Canada releases its first survey-based acreage estimates on April 27, and most pre-report estimates are calling for planted canola area well above the 23 million acres seeded in 2017.
Read Also
Canadian Financial Close: C$ firm Friday
Glacier FarmMedia — The Canadian dollar strengthened Friday, as dovish comments out of the United States Federal Reserve weighed on…
Soybean futures at the Chicago Board of Trade were down on the day, which tempered the upside potential in canola.
About 33,020 canola contracts traded on Thursday, which compares with Wednesday when 34,456 contracts changed hands. Spreading was a feature, accounting for 22,098 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were lower on Thursday, despite relatively solid weekly export sales.
The United States Department of Agriculture reported weekly U.S. soybean export sales of about 2.1 million tonnes for old and new crop combined, which was at the top end of trade estimates.
However, nearby demand from China has dried up and concerns that the mounting trade dispute between the U.S. and China will cut into exports to the major buyer weighed on values.
Bearish chart signals added to the softer tone, with some stops hit on the way down.
CORN futures were lower on the day, taking some direction from soybeans. However, weekly U.S. corn export sales of about 1.1 million tonnes were at the high end of trade estimates and provided some support.
Concerns over seeding delays and the possibility of some intended corn acres shifting into beans in the Midwest also kept some buying interest in the market.
WHEAT futures were mixed with gains in the Kansas City and Chicago winter wheats, but losses in Minneapolis spring wheat.
Weekly U.S. wheat sales were a net negative for the current marketing year, with new crop sales of about 240,000 tonnes at the low end of trade estimates.
While the poor export demand and large world supplies did weigh on wheat prices, the weather concerns in the southern U.S. Plains were enough to provide some support. There is some moisture in the forecasts, but traders don’t think it will be enough to cause significant improvement in the driest areas.
