By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Sept. 24 (MarketsFarm) – The ICE Futures canola market was up sharply on Friday, finding spillover support from outside vegetable oil markets.
European rapeseed and Malaysian palm oil futures both set fresh contract highs overnight, with Chicago soyoil also posting solid gains.
Tight supplies and drought concerns were also supportive, although seasonal harvest pressure did temper the gains. Ideas that canola remains overpriced also weighed on prices.
Weekly data from the Canadian Grain Commission showed total canola exports through the first seven weeks of the 2021/22 crop year of 387,900 tonnes running nearly a million tonnes behind the previous year’s pace.
About 22,772 canola contracts traded on Friday, which compares with Thursday when 19,134 contracts changed hands. Spreading accounted for 14,752 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade held onto small gains in the most active months on Friday, with continued strength in soyoil providing support despite small losses in soymeal.
Solid export demand contributed to the gains, although reports that some Chinese crushing plants were shutting down in order to comply with government restrictions on power usage could limit sales going forward.
The International Grains Council left their estimate for world soybean production in 2021/22 unchanged at 380 million tonnes, with ending stocks at 57 million. If realized, production would be up by 18 million tonnes on the year, while stocks would only increase by three million tonnes as demand is also expected to rise.
The advancing United States harvest kept some caution in the soybean market, with the early stages of seeding in Brazil also being followed closely.
CORN was weaker, seeing some harvest pressure ahead of the weekend.
World corn production for this year was raised by seven million tonnes by the IGC to a record 1.209 billion tonnes. The projected world corn carryout was forecast at 282 million tonnes, which would be up by eight million on the year.
In addition to the advancing U.S. harvest, reports out of Argentina show farmers there were making progress seeding their next corn crop, with 8.5 per cent of intended acres in the ground.
WHEAT was mixed, with losses in Kansas City hard red winter wheat, and gains in the Minneapolis and Chicago contracts.
The IGC lowered their estimate for world wheat production by a million tonnes, to 781 milion. However, that would still be up one percent on the year.
Canada’s spring wheat harvest is running well ahead of normal, according to provincial reports, but the smaller yields remained supportive for the U.S. futures.