ICE Futures Canada canola contracts chopped around for much of the holiday-shortened week before fund positioning pushed the front-month contracts up $5 on April 13. The spike left the May contract perched at the technically important $500-per-tonne mark.
One of the main factors underpinning the canola market continues to be the idea that stocks of old-crop canola are beginning to disappear, and shortages could be an issue before the new crop is ready.
Combines had been rolling across Alberta during the early portion of the week taking off crops left over from the fall, before rain and snow ground that to a halt on Thursday. Long-range forecasts also indicated more wet weather could be on the way before the month of April is over.
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Intermonth spreading was a key feature too, as farmers rolled out of May and into July. Spreads were narrowing, which could be an indication that supplies are tightening.
Slow farmer selling added to the upside and cash basis levels were said to be improving slightly across Western Canada.
On the other side, weakness in Malaysian palm oil weighed on the market, along with the rapidly advancing harvest in South America. Some questions were also raised about falling crush margins in China and what that could mean for future demand.
On Friday, Statistics Canada is scheduled to release its first acreage projections for the year. Trade guesses generally range from 20 million to 22 million acres for canola. Last year 20.4 million acres were seeded. While a few analysts may think more acres will be planted than most expect, one participant said he thinks that will be difficult as many farmers are leery of over-rotating canola.
It was a volatile week for U.S. soybeans as the U.S. Department of Agriculture’s latest monthly supply/demand report projected larger-than-expected world and U.S. soybean ending stocks. Prices temporarily plummeted before correcting higher. The front-month May contract finished roughly 14 cents per bushel higher.
Corn futures also posted gains to end the week, climbing four cents per bushel. Wet weather in portions of the U.S. Midwest delayed planting in certain areas, which was supportive for prices. It also raised ideas that farmers may switch out acres to other crops if the season does become shortened.
Wheat prices on the Chicago Board of Trade finished a cent higher as record-low acreage in the U.S. kept prices supported. However, wet weather in the U.S. southern Plains has helped replenish soil moisture levels in several parched regions, which was bearish.
