By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Oct. 13 (MarketsFarm) – The ICE Futures canola market was stronger on Thursday, recovering from earlier declines in sympathy with outside markets.
Inflation data out of the United States initially weighed on the grains and oilseeds, but the selling pressure subsided and a move higher in crude oil helped pull the vegetable oil markets up as well – including canola.
Ideas that canola remains cheap compared to other oilseeds, given its wide crush margins, also underpinned the futures.
Harvest operations are in their final stages across the Prairies, with increasing supplies in the commercial pipeline likely keeping a lid on the upside.
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About 35,876 canola contracts traded on Thursday, which compares with Wednesday when 46,627 contracts changed hands. Spreading accounted for 24,018 of the contracts traded.
All three WHEAT markets in the United States posted solid gains on Thursday, recovering from earlier losses.
The ongoing conflict in Ukraine remained at the forefront, with the escalation of Russian attacks over the past week raising concerns over grain movement from the region. Reports that Russia will back out of its current deal allowing grain shipments through the Black Sea contributed to the upswing in wheat.
Early strength in the U.S. dollar index, after inflation data beat expectations, did put some pressure on the futures but the currency backed away from its early advances and was at its lowest level of the past week.
Dryness in the Southern Plains provided underlying support, as seeding of the winter wheat crop progresses but fields are too dry for germination in some areas.
CORN moved up in sympathy with wheat. U.S. ethanol production was up by about five per cent in the latest report from the Energy Information Administration (EIA), hitting 932,000 barrels per day. Supplies of the renewable fuel edged up by one per cent, at 21.9 million barrels. That was up by about 10 per cent from this time last year.
Corn seeding is moving along in South America, with about 13 per cent of Argentina’s next crop in the ground and about 39 per cent in Brazil, according to reports.
SOYBEAN futures were pulled up by the gains in wheat and a turn higher in crude oil but ran into resistance and settled near unchanged as spillover from advances in soyoil was countered by losses in soymeal. Seasonal harvest pressure also kept a lid on the upside.
Solid export demand provided underlying support. The U.S. Department of Agriculture announced private export sales of 264,000 tonnes of soybeans to China and an additional 242,000 tonnes to unknown destinations.
Wednesday’s downward revision to average US soybean yields remained supportive, with tight stocks expectations also underpinning the futures.
