By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 27 (MarketsFarm) – The ICE Futures canola market settled with small losses on Tuesday after posting gains for most of the session.
Hot and dry Prairie forecasts provided underlying support, but those weather concerns have been priced into the market for some time and canola ran into resistance.
Production is generally expected to be down sharply on the year, but the extent of the reduction remains to be seen which was keeping some caution in the market.
Gains in Chicago Board of Trade soybeans and a softer tone in the Canadian dollar were also supportive for canola. However, soybeans finished well off their session highs and soyoil was weaker.
About 14,296 canola contracts traded on Tuesday, which compares with Monday when 11,496 contracts changed hands. Spreading accounted for 6,386 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were narrowly mixed at Tuesday’s close, with the bias to the upside in the most active nearby contracts.
Hot and dry Midwestern weather provided support, with crop conditions declining in the latest weekly United States Department of Agriculture report.
The U.S. soybean crop dropped two points in the good-to-excellent category, now at 58 per cent, with 42 per cent of the crop now in the pod setting stage.
However, expectations for milder conditions later in August tempered the advances somewhat. Soyoil also ran into resistance, backing away from overnight gains to post sizeable losses.
CORN was also underpinned by declining condition ratings for most of the day before settling with small losses.
The U.S. corn crop was rated 64 per cent good-to-excellent by the USDA, which was down one point on the week.
Production issues in other corn growing areas of the world – including dryness in Argentina and excessive rains in parts of China – were also supportive.
WHEAT was mixed, seeing some consolidation in narrow, rangebound activity.
The U.S. spring wheat crop was only nine per cent good-to-excellent in the latest report, which was down two points on the week.
Meanwhile, the advancing U.S. winter wheat harvest put some pressure on values, with 84 per cent of the harvest complete.