By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Oct. 26 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday with the largest gains in the nearby November contract as traders holding short positions worked to exit the front month ahead of its expiry.
Gains in Chicago soyoil provided spillover support for canola, with European rapeseed and Malaysian palm oil futures also up on the day.
Crush margins remain historically wide, which was thought to be keeping end users active on the buy side as canola remains cheap relative to its product values. However, chart resistance held to the upside from a technical standpoint.
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Ample supplies in the commercial pipeline and a firmer tone in the Canadian dollar also tempered the advances.
About 28,676 canola contracts traded on Wednesday, which compares with Tuesday when 32,093 contracts changed hands. Spreading accounted for 21,246 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade traded to both sides on Wednesday, settling within a penny of unchanged in the most active months with support from a rally in soyoil countered by weakness in soymeal.
A slow start to seeding of Brazil’s next soybean crop provided some underlying support, with recent rainfall there keeping some farmers off their fields for the time being.
However, low water volumes along the Mississippi continue to hamper movement from the U.S. interior to export positions on the Gulf Coast.
Conditions remain relatively favourable for good Midwestern harvest progress over the next week, with the influx of farmer deliveries also tempering the upside.
CORN was lacking any clear direction, with the bias turning lower by the close after earlier gains, as the advancing U.S. harvest also weighed on prices.
Weekly U.S. ethanol production of 1.033 million barrels per day was up by 17,000 from the previous week, and the largest level since the end of July. Stocks of the renewable fuel were up by nearly half a million barrels, at 22,291 million.
WHEAT was mixed, with losses in spring wheat and gains in the winter wheat contracts as persistent dryness in the Southern Plains hurts emergence.
The U.S. Department of Agriculture’s Ag Attaché lowered their estimate for Argentina’s next wheat crop to only 15.5 million tonnes from an earlier forecast of 17.5 million citing the country’s ongoing drought. The expected exports were also lowered by two million tonnes, to 10 million tonnes.
Uncertainty over Ukrainian grain exports and whether the Black Sea corridor will remain open remained a feature in the back of the wheat market, as the deal is set to expire on November 19.
