The ICE Futures Canada canola market enjoyed a slight bump during the week ended Oct. 12, as a bullish U.S. Department of Agriculture report lifted the tide for all oilseeds. However, canola futures will likely need more bullish news if they hope to shake free of their recently established range of $490-$500 per tonne.
USDA on Oct. 12 lowered its official estimate for U.S. soybean yields to 49.5 bushels an acre, down from the previous forecast of 49.9. The reduction wasn’t a major one but many traders thought USDA might actually raise the estimate a nudge higher, so it sparked a quick flurry of buying.
However, a number of other factors helped keep canola rangebound. For instance, the Canadian dollar continued to chop around the 80 U.S. cents mark as the market seemed reluctant to move the loonie one way or the other while trade talks between the U.S., Canada and Mexico are ongoing.
The pace of harvest in Western Canada also contributed to the mixed outlook. Wet weather in Alberta during late September and early October delayed combining in many regions. The precipitation has stopped in some areas and drier weather stepped in to fill the gap, but it was tough to say whether farmers would be able to get the rest of the crop off in time. There are ideas that if the crop did come off, the market would react bearishly, but if weather delays keep happening, they could contribute to shortages in the canola system.
Wet conditions in the U.S. Plains have slowed down the soybean harvest, which was also supportive for canola.
The corn market chopped around for much of the week in technical trading, searching for direction. The dominant December contract started the week at the US$3.50 mark before ending near US$3.52. The increase was somewhat surprising, given the fact USDA actually raised its estimate for this year’s corn harvest to 14.28 billion bushels.
November soybeans on the Chicago Board of Trade posted solid gains during the week, ultimately ending Friday at the benchmark US$10-per-bushel mark — a rise largely fuelled by the USDA report.
December wheat on the Chicago Board of Trade ended almost five cents per bushel lower at US$4.395. Demand for U.S. wheat is lacklustre right now as countries focus on cheap supplies coming out of Russia. Rain in the U.S. Plains delayed winter wheat planting but was bearish in that it improved soil moisture conditions.
The trend was similar on the Minneapolis Grain Exchange, with the December contract falling by roughly eight U.S. cents per bushel on the week.
However, it was a different story on the Kansas City Board of Trade, where the front-month December contract hung steady at the US$4.36 mark.