Glacier FarmMedia — The ICE Futures canola market settled at its highest levels in three weeks on Wednesday.
- Trade is expected to be a major topic when Canadian Prime Minister Mark Carney visits China next week, Jan. 13-17. Chinese tariffs have limited Canadian canola exports during the current marketing year, and optimism over possible movement on that front after Carney’s visit was announced Wednesday morning provided support.
- Gains in Chicago soybeans also underpinned canola, although soyoil and European rapeseed futures were lower.
- The March canola contract was trading above its 20-day moving average, settling at the psychological resistance level of C$620 per tonne. An analyst placed the next upside target at C$630.
- Large supplies and expectations for burdensome carryout supplies tempered the upside.
- There were 36,117 contracts traded on Wednesday, which compares with Tuesday when 51,771 contracts changed hands. Spreading accounted for 16,994 of the contracts traded.
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SOYBEAN futures at the Chicago Board of Trade were stronger Wednesday, as recent export demand provided support.
- There were no fresh flash sales announced Wednesday, but China has been in the market earlier in the week and expectations are for solid weekly exports in Thursday’s report from the United States Department of Agriculture.
- Speculative positioning and a lack of significant farmer selling in the cash market were also supportive.
- Large South American production prospects tempered the upside, with the Brazilian harvest in its early stages.
CORN futures were stronger, as positioning ahead of next week’s monthly supply/demand estimates from the U.S. Department of Agriculture remained a feature. Quarterly stocks data will be released in addition to updated production estimates.
- Pre-report trade guesses call for a downward revision to average corn yields in next week’s report.
- Export demand for U.S. corn remains relatively solid.
- Weekly U.S. ethanol production dipped by 22,000 barrels per day in the latest reporting period, coming in at 1.098 million barrels, reported the U.S. Energy Information Administration (EIA).
WHEAT futures were stronger Wednesday, as declining condition ratings for winter wheat in several key states provided support.
- The Kansas winter wheat crop was rated 60 per cent good to excellent as of Jan. 6, which was down two points from the end of November, but still above the level at the same time a year ago.
- Oklahoma winter wheat condition ratings fell to 31 per cent good to excellent, which compares with 40 per cent on Nov. 24 and 45 per cent at the same point a year ago.
- While the condition ratings were supportive, analysts noted that conditions in the spring will be more important in determining eventual yields.
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