By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Jan. 24 (CNS Canada) – ICE Futures canola contracts were higher for the third straight session, as supportive nearby technical signals brought in speculative buying interest.
Recent weakness in the Canadian dollar was also supportive, while improving basis levels in the countryside were said to be a sign of solid end user demand.
However, concerns over a possible slowdown in exports to China, as Canada and China remain in the middle of a diplomatic dispute, kept a lid on the advances.
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A softer tone in Chicago Board of Trade soybeans for most of the session also put some pressure on canola.
About 27,419 canola contracts traded on Thursday, which compares with Wednesday when 29,742 contracts changed hands. Spreading accounted for 17,064 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade held near unchanged on Thursday, finishing with small gains in the most active front months.
The International Grains Council released updated supply/demand estimates, lowering their world soybean production estimate for the year by 4 million tonnes, to 363 million, with hot and dry weather cutting into Brazilian yields behind the revision. However, total world production is still expected to be about 22 million tonnes above the previous year’s level, with projected world ending stocks also rising.
Uncertainty over Chinese demand kept some caution in the market, as exports from the United States may not be able to see much increase even if some sort of agreement is reached.
Brazil’s harvest is already underway, and new crop beans are moving from the country’s ports. While dryness concerns remain somewhat supportive, the latest forecasts call for more moisture in some of the dry regions.
CORN futures were lower on the day, as the market continued to back away from recent gains to trade in the middle of its well established range.
The IGC pegged world corn production this year at 1.076 billion tonnes, which would be up by 4 million from an earlier estimate and 29 million tonnes above the year-ago level. However, the world corn carryout is expected to tighten to 271 million tonnes, from 304 million in 2017/18, due to increased consumption.
WHEAT futures were mixed Thursday, with losses in the Chicago and Kansas City winter wheats, and a firmer tone in Minneapolis spring wheat.
The IGC estimated 2018/19 global wheat production at 737 million tonnes, which would be down by about 30 million from the previous year. However, with many 2019/20 winter wheat crops already in the ground for the next marketing year, production for 2019/20 is forecast to rise back to 751 million tonnes.
Signs of improving export demand for U.S. wheat, coupled with talk that Russia may be putting in measures to limit exports, were supportive.
