By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 13 (MarketsFarm) – The ICE Futures canola market was mostly higher on Thursday, hitting its strongest levels in six months as bullish chart signals, production uncertainty and spillover from outside markets all provided support.
Concerns over continued dryness across much of the Prairies were supportive, with little precipitation in the long-range forecasts.
Gains in outside markets, including Chicago soyoil and European rapeseed, also underpinned canola.
However, strength in the Canadian dollar put some pressure on canola. Farmer selling was also likely coming forward at the highs.
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About 31,214 canola contracts traded on Thursday, which compares with Wednesday when 46,325 contracts changed hands. Spreading accounted for 16,240 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, seeing a correction after Wednesday’s losses.
Dry Midwestern weather forecasts had traders second-guessing yesterday’s bearish United States Department of Agriculture production and stocks estimates, with yields unlikely to live up to the lofty expectations of the report.
Solid export demand contributed to the gains. The USDA reported weekly export sales of about 300,000 tonnes of old and new crop business combined, with an additional 315,000 tonne flash sale to Mexico.
Broad weakness in the U.S. dollar index was also supportive, as the currency fell to its lowest level in over a year.
CORN was also due for a correction after yesterday’s losses, posting solid gains.
While there is some rain in the nearby Corn Belt forecast, the longer-range outlooks remain hot and dry which kept a weather premium in the market.
Weekly U.S. corn export sales topped expectations, with 468,000 tonnes of old crop business and an additional 470,000 tonnes for movement next year.
Rising production estimates out of Brazil, as they harvest their second corn crop, tempered the upside.
WHEAT ended higher after trading to both sides of unchanged throughout the session.
Concerns over the state of the North American spring wheat crop were supportive, however large global supplies and the advancing U.S. winter wheat harvest weighed on prices.
The Rosario Grain Exchange pegged Argentina’s wheat crop at only 15.6 million tonnes, which compares with the USDA’s already low forecast of 17.5 million tonnes. Declining European crop estimates were also supportive.
Tensions in Ukraine remained a feature in the background of the wheat market, with the agreement allowing Ukrainian grain to move through the Black Sea set to expire soon.
