By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 6 (MarketsFarm) – The ICE Futures canola market was stronger on Monday, testing major chart resistance as speculators covered short positions.
Solid gains in the Chicago Board of Trade soy complex provided spillover support for canola, as hot and dry weather across the Midwest sparked a rally in the United States futures.
Excessive moisture in parts of Western Canada, including hail and flood damage, added to the weather-related strength in canola.
However, chart-resistance held to the upside, with the November canola contract failing to hold above the C$480 per tonne level. A sustained move above that level could spark additional fund short-covering, according to a broker.
About 17,774 canola contracts traded on Monday, which compares with Friday when 3,378 contracts changed hands. Spreading accounted for 4,538 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade posted solid gains on Monday, with forecasts calling for hot and dry conditions across much of the United States Midwest over the next week accounted for much of the buying interest.
Expectations for a slight decline in the weekly U.S. crop condition ratings were also supportive.
The U.S. Department of Agriculture reported private export sales of 264,000 tonnes of soybeans to China this morning, which helped alleviate some concerns over mounting tensions between the two countries.
CORN futures were also boosted by the hot and dry weather across the Corn Belt and solid export demand.
The USDA reported private export sales of 204,000 tonnes of corn to China and 182,000 tonnes to Mexico this morning.
The USDA’s monthly supply/demand report will be released Friday, and some pre-report positioning is expected over the next few days.
WHEAT futures were mostly higher, with spillover from the gains in corn countered by the advancing U.S. harvest.
The U.S. winter wheat harvest is expected to be over half complete to as much as two-thirds done as of July 5.
Meanwhile, rains in the northern U.S. were thought to have helped spring wheat in the area, with condition ratings expected to improve on the week.
Argentina’s Buenos Aires Grain Exchange lowered their acreage estimate slightly, as dryness limited some seedings.
Russia’s wheat crop was also downgraded by analysts there to 80.9 million tonnes, from 82.7 million tonnes, as early yield reports start to come in.