North American Grain/Oilseed Review: Canola rally continues
The ICE Futures canola market was stronger on Thursday, hitting fresh contract highs as tightening old crop supplies and a rally in the Chicago Board of Trade soy complex provided support.
End users scrambling to secure coverage of dwindling old crop stocks accounted for some of the strength in the market, with concerns over dryness cutting into new crop production also supportive, according to traders.
Statistics Canada releases its first survey-based acreage estimates on April 27. General expectations are for an increase in seeded canola area from the 20.8 million acres planted in 2020, but agronomic factors and competition with other crops may limit the extent of the increase.
About 24,305 canola contracts traded on Thursday, which compares with Wednesday when 21,214 contracts changed hands. Spreading accounted for 16,612 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, climbing to fresh contract highs as tight world supplies had speculators covering short positions and putting on fresh longs.
Basis levels in the United States countryside remain very strong, highlighting the tight supply situation.
Bullish technical signals contributed to the rally, as the move to new contract highs encouraged more buying as values broke above major trend-lines.
Weekly U.S. soybean export sales came in at just under 400,000 tonnes of old and new crop business combined.
CORN posted limit-up gains in the front months, as weather concerns added to the bullish speculative rally.
Cold Midwestern weather was a supportive influence, as seeding delays and possible damage to already planted fields raised concerns over new crop production.
Soft weekly export sales did nothing to temper the rally, with the 387,000 tonnes of old crop business at the low end of expectations.
Argentina’s Rosario Grain Exchange pegged the country’s corn crop at 50 million tonnes, which would be up by 1.5 million tonnes from an earlier forecast. Soybean production was left unchanged at 45 million.
WHEAT futures were nearly up their 40 cent daily limit in many months, also caught up in the speculative rally.
Cold U.S. temperatures were underpinning the winter wheats, with forecasts calling for freezing conditions across a large part of the U.S. Plains. Meanwhile dryness in the spring wheat growing regions underpinned the Minneapolis futures.
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