By Phil Franz-Warkentin
Glacier FarmMedia MarketsFarm – The ICE Futures canola market settled at its highest levels in three weeks on Wednesday, underpinned by supportive technical signals, spillover from gains in outside markets and talk that China was in the market booking some cargoes of Canadian canola.
Malaysian palm oil climbed to its highest levels in six months in overnight activity, while Chicago soyoil was stronger on the day.
Chart-based speculative positioning contributed to the gains, as the May contract held above its 20-day moving average. However, an attempt at moving above psychological resistance at C$600 per tonne was short-lived, with selling coming forward above that level.
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ICE canola falling further
Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange extended Wednesday’s downturn this morning, pressured by declining comparable oils….
Statistics Canada releases planted acreage estimates on Monday, March 11, with average trade guesses expecting intentions to come in below the 22.1 million acres seeded in in 2023.
There were an estimated 35,323 contracts traded on Wednesday, which compares with Tuesday when 34,094 contracts traded. Spreading accounted for 19,350 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, despite gains in soyoil, with relatively favourable South American crop weather behind some of the selling pressure.
Positioning ahead of Friday’s monthly United States Department of Agriculture supply/demand report was a feature. Updated production estimates for Brazil and adjustments to U.S. ending stocks will be followed closely.
The USDA has consistently called for a larger soybean crop in Brazil compared to other forecasters, and traders will be watching to see if the USDA finally cuts their number to be more inline with other trade guesses.
CORN was also pressured by the favourable South American weather, although the market found some support and managed to settle with small gains.
Average trade guesses call for smaller Brazilian corn production and tightening U.S. stocks in Friday’s report.
Seeding of Brazil’s second corn crop is reportedly nearing completion, with 86 per cent of intended acres in the ground according to a report from AgRural. That compares with the average for this time of year of 70 per cent.
WHEAT futures were sharply lower, hitting their weakest levels in three-and-half years in many contracts, as U.S. wheat continues to face stiff competition in the global export market – especially from Russia.
Relatively favourable conditions for the U.S. winter wheat crop also weighed on values, with expectations for rising world wheat stocks in Friday’s USDA report another bearish influence.
