By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 7 (MarketsFarm) – The ICE Futures canola market was mixed on Friday, with gains in the old crop July contract and losses in the new crop months. Expanded daily trading limits saw the July contract climb above the psychological C$1,000 per tonne level for the first time ever.
Statistics Canada confirmed the tightening old crop supply situation in their latest stocks report out this morning. Total canola supplies in the country of 6.6 million tonnes as of March 31, would mark the tightest stocks on that date in eight years.
The market is working to ration demand through the final months of the crop year, with end users bidding up in order to secure coverage of those dwindling supplies. Bullish technical signals and gains in the Chicago Board of Trade soy complex were also supportive for canola.
However, recent strength in Canadian dollar put some pressure on values. Chart-based positioning and overbought price sentiment also weighed on the new crop months ahead of the weekend.
About 23,740 canola contracts traded on Friday, which compares with Thursday when 16,888 contracts changed hands. Spreading accounted for 6,186 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Friday, hitting fresh multi-year highs once again.
Expectations for tightening soybean stocks in the monthly United States Department of Agriculture supply/demand report, due out on May 12, accounted for some of the buying interest in soybeans with ongoing strength in world vegetable oil markets also supportive.
The first production estimates for 2021 will also be out in next week’s report.
Canada’s soybean stocks as of March 31 came in at just under two million tonnes, according to Statistics Canada. That was down by 30 per cent from the same time a year ago.
CORN futures had been down with profit-taking in early activity, but managed to turn higher as the day progressed.
Dryness concerns out of Brazil remained a key driver of the corn market, as the second corn crop there remains in need of precipitation. Next week’s USDA report is expected to include a production cut to the country’s corn crop.
The USDA announced private exports of 1.36 million tonnes of new crop corn to China this morning, with an additional 188,000 tonnes of business to unknown destinations split between the current marketing year and the new crop.
WHEAT futures were up in sympathy with corn and soybeans.
Canadian wheat stocks as of March 31 totalling 16.2 million tonnes were down by 2.5 million tonnes from the same time a year ago.
Worsening drought conditions in the Canadian Prairies were also supportive for the U.S. futures.