By Phil Franz-Warkentin and Dave Sims, Commodity News Service
Winnipeg, August 13 – ICE Futures Canada canola contracts finished with solid gains on Thursday, as the market saw a corrective bounce off of Wednesday’s two-month lows.
Canola dropped sharply in sympathy with CBOT soybeans on Wednesday, as the futures reacted to some surprisingly bearish production estimates from the USDA. With beans correcting higher on Thursday, canola also benefitted from some chart-based positioning, according to participants.
Weakness in the Canadian dollar was also somewhat supportive for canola. In addition, the supply/demand projections for canola are much tighter than soybeans, and the need to ration demand going forward helped underpin the canola market.
Read Also
Canadian Financial Close: Loonie holds steady
By Glen Hallick Glacier Farm Media | MarketsFarm – The Canadian dollar remained firm on Monday following modest increases in…
However, losses in CBOT soyoil did put some pressure on values. Wednesday’s losses were also bearish from a chart standpoint, making any advances a possible selling opportunity.
About 18,201 canola contracts were traded on Thursday, which compares with Wednesday when 36,098 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
SOYBEAN prices corrected 17 to 18 cents per bushel higher Thursday, after hitting a two-month low the previous session. A report by the USDA suggested a bumper US soybean crop was on the way which roiled markets and stymied analysts who were predicting a bullish report.
Many analysts are skeptical about the USDA report given the moisture challenges the US Midwest has endured. They also are confident the report’s figures are the highest projections that will be released for the season.
China’s currency has stabilized which restored some confidence to the market.
SOYOIL futures in Chicago ended 11 to 12 points lower on weak export data, with spreading against soymeal a feature.
SOYMEAL futures ended higher following soybeans.
Corn futures on the Chicago Board of Trade ended seven cents per bushel higher Thursday, as the market corrected itself following yesterday’s massive losses.
The market also benefited from a bump in commercial demand, according to a report.
The ethanol market also rebounded which aided corn as it is sometimes used as an ingredient in the fuel.
Wheat futures on the Chicago Board of Trade, corrected 11 cents per bushel higher after sinking three percent during the previous session.
Prices also received support from a USDA report that pegged US production in the 2015/16 crop year at a level that was below analysts’ estimates. The agency predicted US wheat output would be 2.136 billion bushels in the year beginning June 1, which was below the previous prediction of 2.148 billion.
Technical buying was also a feature of today’s activity after values fell below the benchmark US$5 per bushel mark.
An analyst also said good quality milling wheat could be hard to find this season.
– The wheat area in England has dipped 5.8% for this summer’s harvest while barley plantings have risen by 6%, according to a report.
– Grain harvest in Russia this year may reach 103 million tons, traders said.
– Export prices for barley harvested from Kazakhstan in June decreased by 14.4%, according to a report.
