By Phil Franz-Warkentin, MarketsFarm
Winnipeg, June 12 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, taking some direction from Chicago Board of Trade soybeans.
Soybeans were up sharply as wet weather across the Midwestern United States continued to stress crops and delay seeding.
Meanwhile, a persistent lack of moisture in some key Canadian growing regions also remained supportive, according to traders.
However, the large old crop supply situation and persistent concerns over trade with China tempered the upside.
Canola prices also neared chart resistance from a technical standpoint.
About 36,188 canola contracts traded on Wednesday, which compares with Tuesday when 29,385 contracts changed hands. Spreading accounted for 25,274 of the contracts trade.
SOYBEAN futures at the Chicago Board of Trade posted solid gains on Wednesday, as persistent seeding delays had speculators covering their short positions.
After already moving to the long side in corn, speculators were still holding a large net short position in soybeans that they are now covering, according to market participants.
Forecasts calling for heavy rains across much of the United States Corn Belt over the next week provided the catalyst for the rally, as soybean planting is running well behind normal and more delays are expected given the wet weather.
The U.S. Department of Agriculture left its soybean production estimate unchanged at 4.15 billion bushels in yesterday’s report, but adjustments are expected in future reports.
Ongoing uncertainty over the China/U.S. trade dispute kept some caution in the bean market ahead of a possible meeting between the leaders of the two countries later this month.
CORN was firmer, finding some spillover strength from the gains in beans.
Tuesday’s larger-than-expected cut to U.S. corn production from the USDA remained supportive, as the trade factors in the lower yields and acres.
Solid demand from the ethanol sector added to the strength in corn, with the latest weekly report showing the largest production rate of the renewable fuel in 10 months.
WHEAT was mixed, with gains in the winter wheats and losses in Minneapolis spring wheat.
The forecasted rains in the Eastern Corn Belt will be especially detrimental to the soft wheat crops, causing the Chicago premium over Kansas City wheat to climb higher. Parts of the Southern Plains should also see harvest delaying rains.