North American Grain/Oilseed Review: Canola higher after choppy day

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Sep. 6 (CNS Canada) – ICE Futures canola contracts ended higher on Thursday, after a choppy day that saw the market trade to both sides of unchanged.

Continued weakness in the Canadian dollar, which has lost about one cent relative to its United States counterpart over the past week, provided some support.

Uncertainty over the extent of the damage caused by recent frosts across parts of the Prairies added to the firmer tone, according to participants.

However, chart resistance tempered the upside, with the November contract holding below the psychological C$500 per tonne mark.

Statistics Canada pegged canola ending stocks, as of July 31, 2018, at 2.4 million tonnes in a report out this morning. While that was about a million tonnes above the previous year’s carryout, the stocks were still well within trade expectations and did little to move the market.

About 13,176 canola contracts traded, which compares with Wednesday when 10,589 contracts changed hands. Spreading accounted for 7,674 of the contracts traded.

SOYMEAL futures settled with small gains on Thursday, with strength in soymeal providing some support. However, the underlying fundamentals remained bearish, tempering the upside.

Soybean harvest operations are underway across the United States, and early indications point to a big crop.

Private forecaster Informa Economics raised their U.S. soybean yield projection to 52.9 bushels per acre. That’s up by 1.3 bushels per acre from the current U.S. Department of Agriculture estimate.

Ongoing trade issues with China also weighed on prices, with additional tariffs a possibility.

CORN futures were steady to a bit firmer at the close, as early selling pressure subsided late in the day.

Informa estimated U.S. corn yields at 178.8 bushels per acre, which would be up by 0.4 bushels from the USDA’s current estimate.

The USDA releases its own updated production estimates next week Wednesday, Sep. 12.

WHEAT futures remained stuck in a downtrend on Thursday, as strength in the U.S. dollar index cut further into the global export interest in the country’s wheat.

Canadian wheat ending stocks of 6.2 million tonnes were down by about 10 per cent from last year, providing some support for the futures.

Drought concerns in Australia also provided some support.

Futures Prices as of September 6, 2018

Canola
2018-09-06 13:19
Price Change
Nov 498.30 1.70
Jan 504.80 1.00
Mar 509.80 1.10
May 513.30 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

explore

Stories from our other publications