By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 21 (CNS Canada) – ICE Futures canola contracts were stronger on Thursday, as speculative short-covering and spillover from the advances in the Chicago Board of Trade soy complex provided support.
Improving trade sentiment between the United States and China, underpinned the soy market and that buying interest spilled into canola as well.
The Canadian dollar was slightly weaker, which also provided some support. Crush margins improved by roughly C$6 per tonne on the day.
However the underlying fundamentals remained bearish, with ample supplies, lacklustre demand and steady farmer selling all tempering the upside.
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About 32,389 canola contracts traded on Thursday, which compares with Wednesday when 36,687 contracts changed hands. Spreading accounted for 25,760 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were higher on Thursday. Optimism on the Chinese trade front was a key driver, amid talk that China was planning on buying an additional US$30 billion-worth of agricultural goods from the United States on an annual basis.
However, there with no actual deal yet in place, the uncertainty of the rumours kept some caution in the market.
The U.S. Department of Agriculture held its annual outlook forum on Thursday. The government agency predicted that U.S. would seed 85 million acres of soybeans this spring, which would be well below the 89.2 million seeded last year.
Six weeks-worth of export sales data will be released on Friday, as the USDA finally catches up following the month-long government shutdown. Trade estimates on how many beans were sold during the six weeks ended February 14 range anywhere from about 6 million to 9 million tonnes.
CORN futures were also higher on the back of the trade news.
The USDA’s outlook forum forecast U.S. corn plantings this spring at 92 million acres, which would be nearly 3 million acres above the 2018 acreage base.
U.S. corn exports during the past six weeks are estimated at anywhere from 4 million to 7 million tonnes.
All three WHEAT markets were higher, seeing a correction after recent declines.
The USDA estimated total wheat plantings in the country at 47 million acres, which would be down by 800,000 acres on the year.
The International Grains Council released updated world ending stocks projections. The IGC lowered its estimate for global wheat ending stocks this marketing year by one million tonnes, to 262 million.
