North American Grain/Oilseed Review: Canola rally continues

The ICE Futures canola market was up sharply for the second-straight session on Thursday, as bullish technical signals kept speculators on the buy side.

A rally in the Chicago Board of Trade soy complex provided spillover support for canola, according to participants. Malaysian palm oil and European rapeseed futures were also higher.

Canada’s tight supply situation and ideas that the recent selloff was overdone contributed to the gains in canola.

However, a firmer tone in the Canadian dollar put some pressure on values.

About 26,697 canola contracts traded on Thursday, which compares with Wednesday when 30,877 contracts changed hands. Spreading accounted for 9,908 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, as bullish chart signals and follow-through buying after yesterday’s rally provided support.

Uncertain South American crop prospects kept a weather premium in the soy market. While parts of Argentina were receiving much needed rain, at least a quarter of Brazil’s crop was reportedly still being stressed by drought.

Production estimates out of the two South American countries also continue to see downward revisions.

Brazilian farmers were also reportedly holding out on making sales, limiting exports from the country and leaving the door open for more United States business.

Customs data out of China showed soybean imports from the U.S. were nearly double the previous month in December, with trade rumours on Thursday that the country was buying more U.S. cargoes.

Weekly export sales data was delayed due to Monday’s Martin Luther King Jr. holiday.

CORN also saw some follow-through buying after Wednesday’s gains, but ran into resistance and settled narrowly mixed.

Weekly ethanol data showed U.S. production of the renewable fuel increased to 1.05 million barrels per day in the week ended Jan. 14. That was up by 40,000 from the previous week and well above trade estimates that had anticipated a slight decline.

WHEAT was mixed, with gains in Minneapolis spring wheat and losses in the winter wheats.

Cold temperatures across key US winter wheat growing areas remained somewhat supportive.

The geopolitical tensions between Russia and Ukraine also kept some caution in the wheat market, as the two countries are both major world wheat exporters.

The Western Producer

Tags: soybean futures, corn futures, Production, palm oil, canola market, wheat futures, rapeseed futures