By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, April 21 (MarketsFarm) – The ICE Futures canola market was mixed on Friday, with gains in the front months and losses in the new crop contracts.
Speculative short covering accounted for much of the buying interest in the nearby contracts, with weakness in the Canadian dollar and wide crush margins also supportive.
However, losses in Chicago soyoil and European rapeseed accounted for some spillover selling pressure. Expectations for a large crop in 2023, despite possible seeding delays in parts of the Prairies, also weighed on values.
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Statistics Canada is scheduled to release its first survey-based acreage estimates of the year on April 26, with most analysts expecting little change from the 21.4 million acres of canola planted in 2022.
About 29,970 canola contracts traded on Friday, which compares with Thursday when 30,683 contracts changed hands. Spreading accounted for 19,898 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were lower for the third straight session on Friday, with bearish chart signals and uncertainty in United States financial markets ahead of next week’s interest rate announcement from the Federal Reserve behind some of the activity.
Large Brazilian supplies are also starting to displace U.S. beans in the world export market, although declining production prospects out of Argentina remained supportive.
On Thursday, the International Grains Council raised their estimate for 2023/24 world soybean production to 401 million tonnes which would be up by 2 million from an earlier estimate and 31 million tonnes above the current crop. World soybean ending stocks were pegged at 60 million tonnes, an 11 million tonne increase on the year.
CORN was also pressured by increased export competition from Brazil, as the harvest of the country’s summer crop is just over half complete. Conditions are also relatively favourable for development of the second crop.
World corn ending stocks are forecast to rise to 264 million tonnes next year by the IGC, a six million tonne increase from what’s expected for the current marketing year.
WHEAT was mostly lower, with chart-based speculative selling a feature.
Forecasts calling for colder temperatures and the potential for frost across parts of the U.S. Plains and Midwest over the next week provided some support. However, ideas that the moisture that’s also expected will help replenish dry soils kept the weather as a bearish influence overall.
