North American Grain/Oilseed Review: Canola still pointed higher

By Phil Franz-Warkentin, MarketsFarm

WINNIPEG, Nov. 18 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, hitting fresh contract highs as a rally in Chicago Board of Trade soyoil provided spillover support.

Speculators adding to long positions were behind some of the buying interest, with end users also showing good demand.

While canola prices have strengthened considerably over the past month, prices have lagged the product values to the upside. With crush margins widening, canola still looks relatively cheap compared to other oilseeds.

Scale-up hedge selling and a firmer tone in the Canadian dollar put some pressure on values, tempering the advances.

About 30,834 canola contracts traded on Wednesday, which compares with Tuesday when 27,363 contracts changed hands. Spreading accounted for 20,630 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade hit fresh four-year highs on Wednesday, with the latest optimistic news on the COVID-19 vaccine front behind some of the buying interest.

Bullish chart signals contributed to the gains, with fund traders adding to their long positions.
Solid export demand and dryness concerns in South America were also supportive.

Recent rains failed to live up to expectations in some dry areas of Brazil, with the likelihood of production losses in the country and a late harvest keeping exporters focused on buying from the United States.

However, profit-taking came forward and soybeans settled well off their highs for the day.

CORN futures were also up on the day, as any signs of an end to the pandemic have been especially supportive the grain due to its relationship to ethanol production and crude oil.

Solid export demand was also supportive. The U.S. Department of Agriculture announced private export sales of 140,000 tonnes of corn to unknown destinations this morning.

WHEAT futures were higher in sympathy with the other grains, with weakness in the U.S. dollar also supportive.

A number of countries were tendering for wheat on Wednesday, with the U.S. likely to fill at least some of that business.

Ideas that Russia would implement more measures to slow exports and shore up their own domestic supplies were also supportive.

Futures Prices as of November 18, 2020

Price Change
Milling Wheat
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New Barley
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Prices are in Canadian dollars per metric ton

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