Weather worries keep canola pointed higher
By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 2 (MarketsFarm) – The ICE Futures canola market was stronger on Friday amid ongoing concerns over hot and dry Prairie weather as activity resumed after the Canada Day long weekend.
Nearly all of Western Canada from British Columbia through to Northern Ontario was under heat warnings from Environment Canada, with the only precipitation in the forecasts tied to sporadic thunderstorm activity.
Gains in Chicago Board of Trade soyoil futures were also supportive for canola, although soybeans held closer to unchanged as that market continued to consolidate after Wednesday’s rally.
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Strength in the Canadian dollar, which was up by roughly three-quarters of a cent relative to its United States counterpart, was another limiting factor for canola.
About 20,818 canola contracts traded on Friday, which compares with Wednesday when 29,487 contracts changed hands. Spreading accounted for 4,604 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade settled with small gains on Friday after posting losses for most of the session. Consolidation ahead of the weekend was a feature, with markets in the United States closed Monday for Independence Day.
U.S. oilseed processors crushed 173.48 million bushels of soybeans in May. That was slightly above average trade guesses and the April crush, but still 3.4 per cent below what was processed in the same month a year ago.
The U.S. Department of Agriculture’s acreage numbers from earlier in the week, leaving soybean plantings unchanged from the previous forecast at 87.6 million acres, remained supportive. Old crop supplies are thought to be tight and much of the new crop is dealing with heat and dryness.
CORN was also due for a correction after recent gains, with profit-taking a feature.
However, just as with soybeans, Midwestern weather concerns and Wednesday’s smaller-than-expected acreage data provided some support.
Reports of frost causing damage to Brazilian corn crops, which were already stressed due to dryness through the growing season, also underpinned the corn market.
WHEAT futures were mixed, with a firm tone in Minneapolis spring wheat and losses in the winter wheats.
The vast majority of U.S. spring wheat growing regions are in a state of drought, which kept the Minneapolis futures well supported.
On the other side, the advancing U.S. winter wheat harvest was bearish, with both yields and quality looking relatively decent so far.
