By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Oct. 9 (MarketsFarm) – The ICE Futures canola market was stronger on Friday, with fund buying a feature as bullish technical signals had speculators adding to their large net long positions.
A rally in the Chicago Board of Trade soy complex provided the catalyst for the gains in canola, as the United States futures reacted to the latest supply/demand report from the U.S. Department of Agriculture. Projected U.S. soybean ending stocks for 2020/21, at 290 million bushels, came in at the lower end of trade expectations.
A slowdown in farmer selling, as harvest operations wrap up across the Prairies, added to the firmer tone in canola.
However, chart resistance held to the upside, with the November contract unable to break above the C$530 per tonne level. Strength in the Canadian dollar, which was trading back above 76 U.S. cents, also kept the advances in check.
About 33,604 canola contracts traded on Friday, which compares with Thursday when 17,125 contracts changed hands. Spreading accounted for 23,670 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were up sharply on Friday, as the market reacted to the latest supply/demand estimates from the United States Department of Agriculture.
The USDA lowered its estimate for 2020/21 soybean ending stocks to 290 million bushels. That was down from a projected 460 million in September, and roughly half of last year’s carryout.
U.S. soybean production for the year was lowered one per cent from the September report, at 4.27 billion bushels, due to a drop in harvested acres. Yields were left unchanged at 51.9 bushels per acre. Total soybean production would still be up eight per cent from 2019/20.
Fund buying was a feature before the USDA report, and remained supportive after its release as prices hit new contract highs.
Good Midwestern harvest weather kept a lid on the upside.
CORN futures were also higher on the back of the USDA report.
U.S. corn production was revised lower from an earlier estimate, at 14.7 billion bushels. Total corn ending stocks of 2.167 billion bushels were down from 2.5 billion in September.
U.S. corn yields, at 178.4 bushels per acre, were down by 0.1 bu/ac from September but still up by 10.9 bu/ac from 2019/20. The total corn crop is expected to be up by 20 per cent on the year.
WHEAT futures also found some support from the USDA report, but held closer to unchanged in choppy activity.
Projected U.S. wheat ending stocks at 883 million bushels were down from 925 million in September, and would be the tightest in six years.
Total world wheat production for the year were raised by 2.6 million tonnes, to 773 million tonnes, as a cut to Argentina’s crop was more than made up for by an increase in projected Russian wheat production.
Commodity Future Prices
Prices are in Canadian dollars per metric ton