By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 26 (MarketsFarm) – The ICE Futures canola market was stronger at Monday’s close, recovering from earlier losses amid ongoing Prairie weather concerns.
While light shower activity was reported in some parts of the Prairies, any moisture at this time will only stabilize the crop and won’t be enough to boost production.
A trader said uncertainty over the size of this year’s canola crop, given the drought conditions in many areas, kept some caution in the futures with participants unsure what price level was needed to ration demand.
Early declines in Chicago Board of Trade soybeans put some spillover pressure on canola, but soybeans and soyoil were both higher on the day.
About 11,496 canola contracts traded on Monday, which compares with Friday when 14,528 contracts changed hands. Spreading accounted for 4,256 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were higher at Monday’s close, after trading within a wide range as investors tried to get a better handle on Midwestern weather forecasts.
While the nearby outlook remains hot and dry, forecasts calling for milder temperatures in August put some pressure on prices. However, the northern growing regions are unlikely to see much relief.
Chart-based speculative positioning was a feature, as soybeans touched their lowest levels in two weeks before correcting higher. Gains in Malaysian palm oil were especially supportive for soyoil, which helped pull beans higher as well.
CORN was also reacting to shifting weather forecasts, trading within a narrow range.
While the bias was higher in the most active months by the close, ideas that high prices were dissuading some export demand kept a lid on the upside.
WHEAT futures were lower, with seasonal harvest pressure behind some of the weakness in the winter wheats.
A crop tour of United States spring wheat growing regions is going on this week, and traders will be following the results closely. General expectations are for the tour to confirm the poor crop prospects, as an estimated 99 per cent of the U.S. spring wheat crop is thought to be dealing with drought conditions.