North American Grain/Oilseed Review: Canola higher in front months

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Jan. 25 (CNS Canada) – ICE Futures canola contracts were mixed on Friday, with gains in the front months and losses in the new crop positions as the market reacted to activity in the outside currency and vegetable oil markets.

Sharp gains in Chicago Board of Trade soyoil futures provided underlying support, while technical signals were also pointed higher.

However, strength in the Canadian dollar put some pressure on values, with the currency up by more than half a cent relative to its United States counterpart.

Steady farmer selling into the commercial pipeline also kept a lid on the upside, with little reason for end users to bid up the current market.

Farmers delivered 406,300 tonnes of canola during the week ended Jan. 20, according to the latest Canadian Grain Commission data. That brought total visible supplies in the commercial pipeline up to 1.168 million tonnes, from 1.075 million the previous week.

About 22,094 canola contracts traded on Friday, which compares with Thursday when 27,419 contracts changed hands. Spreading accounted for 12,722 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Friday, with pre-weekend speculative buying a feature.

Soyoil led to the upside in the soy complex, following recent strength in Malaysian palm oil.

Ongoing dryness concerns in Brazil were also supportive, as production estimates out of the country continue to be revised lower. Meanwhile, excessive moisture was reportedly causing problems in Argentina.

However, mounting South American harvest pressure did keep some caution in the market.

Uncertainty over trade relations between the United States and China also kept a lid on the upside. Some more talks are scheduled for next week, but the two sides reportedly remain far apart on numerous issues.

U.S. President Donald Trump announced late in the session that the partial government shutdown was ending for three weeks. It’s unknown what the reopening will mean for unreleased U.S. Department of Agriculture reports from the past month.

CORN moved higher, but held within its sideways trading range overall.

With the soybean harvest underway in Brazil, some farmers were also starting to plant the second-corn crop. Meanwhile, in Argentina, corn seeding was nearing completion at about 93 per cent done.

WHEAT futures settled with small losses in the most active months.

Forecasts calling for cold temperatures in some key Midwestern winter wheat growing regions over the next week were somewhat supportive. However, snow cover is thought to be sufficient for the most part.

U.S wheat is reportedly looking more attractively priced on the global market these days, while signs that Russian exports could be slowing down were also supportive.

Futures Prices as of January 25, 2019

Canola
2019-01-25 13:19
Price Change
Mar 488.50 1.50
May 497.10 1.30
Jul 505.10 1.30
Nov 500.40 -1.10
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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