By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Aug. 12 (MarketsFarm) – The ICE Futures canola market stronger on Wednesday, recovering from early losses as a rally in Chicago Board of Trade soyoil provided support.
Bearish chart signals and speculative selling had weighed on canola in early activity, as the market continued to back away from recent highs. Relatively favourable crop prospects and the looming harvest also weighed on values.
However, a rally in CBOT soyoil, spilled over to help canola turn higher as well. The gains in both soyoil and soybeans came despite a larger than expected production estimate from the United States Department of Agriculture.
About 22,438 canola contracts traded on Wednesday, which compares with Tuesday when 17,213 contracts changed hands. Spreading accounted for 9,510 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, despite a relatively bearish production estimate from the United States Department of Agriculture, with ‘sell the rumour, buy the fact’ activity a feature. Expectations for increased demand from China were also supportive.
The USDA pegged U.S. soybean yields in the country at a record 53.3 bushels per acre for 2020, which was well above trade estimates and up by 3.5 bushels per acre from the July forecast. Total soybean production in the country was pegged at 4.4 billion bushels.
The USDA reported private export sales of 258,000 tonnes of soybeans to China Wednesday morning, and an additional 120,000 tonnes to unknown destinations.
CORN futures were also up despite record large production estimates, as expectations for solid demand from the feed sector should still see stocks tighten.
U.S. corn yields were forecast at a record 181.8 bushels per acre, beating average trade estimates. Total U.S. corn production of 15.3 billion bushels would be up 12 per cent on the year.
Weekly U.S. ethanol data showed average daily production of the renewable fuel at 918,000 barrels per day, which was down on the week. Stocks fell to their tightest level since December 2016.
WHEAT futures were narrowly mixed throughout the day. Kansas City hard red winter wheat held onto small gains, while the Minneapolis and Chicago futures ended slightly lower.
Total U.S. wheat production was estimated at 1.8 billion bushels, which would be up slightly from the July forecast.
Of that total, spring wheat was estimated at 577 million bushels, which would be up three per cent on the year. Average U.S. spring wheat yields were estimated at 49.0 bushels per acre.