By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 27 (CNS Canada) – ICE Futures Canada canola contracts settled with small gains on Friday, but the advances were subdued in light of a bullish Statistics Canada acreage report and a rally in Chicago Board of Trade soybeans.
After Canadian farmers seeded a record large 23.0 million acre canola crop in 2017, most industry participants had expected to see an even bigger crop in 2018, with many estimates topping 24.0 million.
However, StatsCan surprised the trade by predicting planted canola area at only 21.4 million acres.
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While that was supportive, canola failed to rally amid ideas that the actual number will still end up larger. Canola was also pressured by losses in Chicago soyoil, which dropped to fresh contract lows. Malaysian palm oil and European rapeseed futures were also weaker on the day.
About 18,485 canola contracts traded on Friday, which compares with Thursday when 14,877 contracts changed hands. Spreading accounted for 6,778 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were higher on Friday, with strong demand for soymeal a key driver as prices for the livestock feed tested contract highs.
Argentina is a major soymeal exporter, and this year’s drought stricken soybean crop in the country has raised concerns over reduced meal production.
Canadian soybean acres are forecast to be down on the year, according to a report from Statistics Canada. Intended soybean area in the country was forecast at 6.4 million acres, which would be well off the 7.3 million seeded in 2017.
CORN futures found some spillover support from soybeans and also moved higher on Friday.
The International Grains Council raised its estimate for world corn production by 2 million tonnes, to 1.054 billion. However, the group also upped its expectations for demand, and total ending stocks were revised lower by 3 million tonnes as a result.
While corn planting is still running behind normal in the United States, improving weather conditions should see farmers make good progress over the next week.
WHEAT futures were mostly higher, with gains in the Chicago and Kansas City winter wheat contracts, but a softer tone in Minneapolis spring wheat for most of the session.
Canadian farmers intend to plant just over 25 million acres of wheat this year, which topped trade guesses and compares with last year’s 22.4 million acre crop. The big Canadian acres, which were primarily composed of spring wheat, weighed on Minneapolis prices.
However, the winter wheat markets found support from the ongoing weather concerns in the southern U.S. Plains, with a tour set for Kansas next week likely to provide a clearer picture on the state of the crops in that key wheat growing region.
