North American Grain/Oilseed Review: Canola follows soybeans lower ahead of USDA

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, March 7 (CNS Canada) – ICE Futures Canada canola contracts were weaker on Wednesday, following Chicago Board of Trade soybeans as traders booked profits ahead of the United States Department of Agriculture monthly supply/demand report set for release on Thursday.

Speculators were noted sellers, as canola backed away from nearby chart resistance. Increased farmer hedges, improving moisture conditions in Western Canada, and large old crop supplies added to the softer tone in canola, according to participants.

However, weakness in the Canadian dollar provided underlying support for canola, with the currency falling by more than half a cent relative to its U.S. counterpart. As a result, crush margins held relatively steady on the day.

About 19,155 canola contracts traded on Wednesday, which compares with Tuesday when 14,505 contracts changed hands. Spreading accounted for 7,246 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were down on Wednesday, as traders took profits ahead of Thursday’s United States Department of Agriculture monthly supply/demand report.

In addition to an updated forecast on U.S. ending stocks, the report will also include revisions to South American production estimates. Average trade guesses are calling for a drop in Argentina’s soybean crop by five million tonnes or more from an earlier estimate. However, Brazilian production should be revised higher.

CORN futures ended slightly lower, after trading to both sides of unchanged in thin activity ahead of Thursday’s USDA report.

Downward revisions to both the Brazilian and Argentine corn crops are expected, with world ending stocks also likely to see a cut of three million to four million tonnes from February’s 203 million tonne estimate.

Solid demand from the ethanol sector provided some support, although rising ethanol stocks and losses in crude oil may cut into that buying interest going forward.

WHEAT futures were all lower on the day, as values backed away from nearby highs.

While persistent dryness across much of the major U.S. winter wheat growing regions remained a supportive influence, a lack of fresh news on the weather front saw prices drift lower today.
Average trade guesses are for an upward revision to U.S. wheat stocks in tomorrow’s report, but a slight decline in world supplies.

Futures Prices as of March 7, 2018

Canola
2018-03-07 13:19
Price Change
May 522.20 -3.80
Jul 526.60 -3.90
Nov 514.00 -1.30
Jan 517.90 -1.50
Milling Wheat
1970-01-01 00:00
Price Change
Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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