North American Grain/Oilseed Review: Canola mixed after choppy day

The ICE Futures canola market was narrowly mixed at Wednesday’s close with the bias higher in the most active front months after a choppy session that saw prices trade within a wide range.

Gains in Chicago soyoil provided underlying support, although soybeans were lower on the day. The need to keep a weather premium in the canola market, with crop development thought to be running at least two weeks behind normal in many areas, added to the firmer tone.

However, strength in the Canadian dollar tempered the advances. The currency was up by roughly two-thirds of a cent relative to its United States counterpart, cutting into crush margins and making exports less attractive to global buyers.

About 22,704 canola contracts traded on Wednesday, which compares with Tuesday when 16,388 contracts changed hands. Spreading accounted for 14,608 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were mostly lower at Wednesday’s close, retreating from early gains as profit-taking came forward to weigh on values.

Solid export demand helped pull the soybean market higher to start the day, as the United States Department of Agriculture announced private export sales this morning of 196,000 tonnes of soybeans to China.

Dry Midwestern weather also underpinned the futures although the forecasts are not as hot as they had been with precipitation expected in some areas.

Positioning ahead of Friday’s USDA supply/demand report remained a feature. Trade estimates on U.S. soybean yields range from about 50 to 52 bushels per acre, with the USDA currently at 51.5 bu/ac.

CORN moved higher, finding support from dry Midwestern weather and weakness in the U.S. dollar. The currency fell sharply as the U.S. annual rate of inflation slowed to 8.5 per cent in July.
Ahead of Friday’s report, average trade estimates expect to see a downward revision to U.S. corn yields from the USDA’s current 177 bushels per acre forecast.

Weekly ethanol data showed the U.S. was producing 1.022 million barrels of the renewable fuel per day in the past week, down slightly from the previous week. Stocks fell to an eight-week low, at 23.256 million barrels.

WHEAT futures were higher, as the weaker U.S. dollar should be making U.S. wheat more attractively priced on the export market.

Updates to U.S. spring wheat acres and production estimates will be followed closely in Friday’s report.