By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Jan. 27 (MarketsFarm) – The ICE Futures canola market was mixed on Thursday, with gains in the front months and losses in the new crop contracts.
Speculative buying accounted for some of the activity in the old crop contracts, with the March contract settling right around its 20-day moving average.
Gains in Chicago Board of Trade soybeans and soyoil provided spillover support for the Canadian oilseed, with soyoil hitting fresh contract highs. Malaysian palm oil and European rapeseed futures were also stronger.
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Weakness in the Canadian dollar, which dipped below 79 U.S. cents, contributed to the strength in canola. Ongoing concerns over tight old crop supplies remained supportive as well. However, attention in the market is starting to turn to the new crop and the likelihood of improved yields after the 2021 drought.
About 29,069 canola contracts traded on Thursday, which compares with Wednesday when 26,107 contracts changed hands. Spreading accounted for 19,272 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, hitting their highest levels in seven months before running into some resistance.
While recent rains in Argentina have eased some of the drought concerns there, production is still expected to come in below earlier expectations which is leaving the door open for more business from the United States.
Weekly U.S. soybean export sales of just over 1.2 million tonnes of old and new crop business combined were in line with expectations.
Private forecasts predict an increase in U.S. soybean acres this spring, with corn area likely down slightly.
CORN traded to both sides of unchanged on Thursday, but the bias was lower with wheat at the close.
Weekly U.S. corn export sales came in at the higher end of trade expectations at 1.4 million tonnes of old crop. However, net reductions of 165,000 tonnes of new crop sales were a bit bearish.
Easing tensions between Russia and Ukraine also weighed on prices.
WHEAT was lower on Thursday, with speculative positioning a feature. Russia and Ukraine were reportedly making some progress in talks taking place in Paris, although the situation between the two countries was still keeping some caution in the market.
The resumption of grain movement in the Black Sea, after adverse weather had hampered activity at some ports earlier this week, also weighed on wheat prices.
Weekly U.S. wheat export sales of nearly 677,000 tonnes were the highest of the marketing year to date, with weakness in the U.S. dollar index on Thursday also conducive to more export business going forward.
