North American Grain/Oilseed Review: Canola moves higher with outside markets

ICE Futures canola contracts posted solid gains on Thursday, underpinned by gains in outside markets.

Crude oil, Chicago soyoil, European rapeseed and Malaysian palm oil were all stronger on the day, lending spillover support to canola.

Canadian crop conditions remain relatively favourable for the most part, although some areas of concern persist. Many fields are thought to be well behind normal in development.

The U.S. Department of Agriculture releases its latest monthly supply/demand estimates on Friday, with pre-report positioning behind some of the activity in the grains and oilseeds.

About 18,041 canola contracts traded on Thursday, which compares with Wednesday when 22,704 contracts changed hands. Spreading accounted for 15,426 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, as uncertain Midwestern forecasts heading into the latter half of August helped keep a weather premium in the market.

While temperatures are showing signs of easing off their highs, there is little rain in the forecasts for many regions.

Weekly United States export data included net reductions of 66,710 tonnes of old crop soybean sales, while new crop sales of just under 500,000 tonnes were in line with expectations.

The U.S. Department of Agriculture announced additional private export sales of 103,400 tonnes of soymeal to Mexico this morning, giving that market an added boost.

Positioning ahead of Friday’s USDA supply/demand report remained a feature, with updated yield and stocks numbers having the potential to swing the markets after their release.

CORN was up ahead of Friday’s report, with average trade guesses calling for cuts to U.S. corn yields and world supplies.

Average trade guesses now call for U.S. corn yields around 176 bushels per acre, which would be down from the USDA’s current forecast of 177 bu/ac.

Meanwhile, France’s Strategie Grains lowered their forecast for European corn production by more than 10 million tonnes placing the crop at 55 million tonnes as heat and drought decimates production.

Weekly U.S. corn export sales included 191,800 tonnes of old crop business and an additional 191,300 tonnes of new crop.

WHEAT futures were higher across the board, with weekly U.S. wheat export sales of about 360,000 tonnes in line with expectations.

Strategie Grains left their European wheat production estimate unchanged at 123.3 million tonnes but lowered their export number by 1.4 million – to 29 million tonnes.

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

Tags: corn, canola, soybean, Grains, oilseeds, wheat, soyoil, rapeseed, palm oil, crop, futures, conditions, markets