North American Grain/Oilseed Review: Canola rallies to fresh highs

By Phil Franz-Warkentin, MarketsFarm

WINNIPEG, May 6 (MarketsFarm) – The ICE Futures canola market was stronger on Thursday, moving up its daily C$30 per tonne limit in the old crop July contract.

Tight supplies and end users scrambling to fulfill commitments accounted for much of the strength in July, with bullish chart signals adding to the gains as any sellers keep to the sidelines and watch prices rise.

Advances in the Chicago Board of Trade soy complex provided spillover buying interest for canola as well.

However, strength in the Canadian dollar was somewhat bearish, as the currency moved above 82 U.S. cents.

Statistics Canada releases its latest stocks report on Friday, showing grain supplies in the country as of March 31. Traders will be watching the report closely for confirmation of the tightening canola stocks.

About 16,888 canola contracts traded on Thursday, which compares with Wednesday when 22,072 contracts changed hands. Spreading accounted for 6,186 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday, hitting fresh contract highs. Ongoing strength in world vegetable oil markets remained supportive, with palm oil hitting its highest levels in 13 years.

The need to ‘buy acres’ and keep intended soybean area in the United States from swinging into corn was also supportive.

The U.S. Department of Agriculture reported weekly U.S. soybean export sales of 165,000 tonnes of old crop business and an additional 193,000 tonnes for delivery in the new crop year. While the business was down on the week, it was still in line with expectations.

CORN continued its uptrend, hitting fresh eight year highs. Dryness concerns out of Brazil remained a key driver of the corn market, as the second corn crop there remains in need of precipitation.

Any crop problems in South America would shift more demand to the U.S., where corn supplies are already thought to be very tight.

Cool Midwestern weather has also raised concerns over the slow development of recently-planed U.S. corn fields.

Weekly U.S. corn export sales of about 240,000 tonnes of old and new crop business combined were down sharply on the week, and below trade expectations.

WHEAT futures were up in sympathy with corn and soybeans, with weather concerns in some wheat growing regions of the world also supportive.

Weekly U.S. wheat export sales included net reductions of 95,600 tonnes of old crop business, as there were more cancellations than fresh sales. However, new crop sales of about 400,000 tonnes were in line with expectations.

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Futures Prices as of May 6, 2021

Canola
Price Change
Milling Wheat
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Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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