By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 4 (MarketsFarm) – The ICE Futures canola market was stronger on Tuesday, posting limit-up gains in the most active July contract. Activity was described as choppy and erratic, with no real catalyst for the latest speculative rally besides spillover from the gains in Chicago soybeans and corn.
Fund traders adding to long positions were a feature of the activity, with tight old crop supplies and concerns over dryness for the new crop also providing support.
A lack of significant selling pressure on the other side, as sellers appear content to watch how high price go, contributed to the gains.
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About 21,390 canola contracts traded on Tuesday, which compares with Monday when 31,812 contracts changed hands. Spreading accounted for 9,916 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade moved higher on Tuesday, as ongoing strength in world vegetable oil markets provided support.
A rally in corn added to the gains in soybeans, as soybean prices need to stay competitive in order to make sure enough acres are seeded this year.
The latest crop report from the United States Department of Agriculture showed 24 per cent of intended soybean acres in the U.S. were planted as of this past Sunday. That compares with the 11 per cent average for this time of year.
CORN was up sharply on the day, as dryness concerns out of Brazil provided the catalyst for the rise and speculative fund buying added to the gains.
Weather forecasts show little chance of precipitation in the near future across most of the Brazilian corn growing regions.
The U.S. corn crop was 49 per cent seeded in the latest USDA report. That’s one point ahead of last year and well above the 36 per cent average seeding pace for this time of year.
WHEAT futures were up in sympathy with corn and soybeans.
The U.S. spring wheat crop was nearly half seeded as of this past Sunday, running well ahead of the 32 per cent average for this time of year. Dryness in the northern growing regions has allowed farmers to make good progress, but the lack of moisture was also raising concerns over the yield prospects.
U.S. winter wheat was rated 48 per cent good to excellent, which was down one point on the week. Meanwhile, 19 per cent of the crop was said to be poor to very poor.
