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North American Grain/Oilseed Review: Short-covering boosts canola ahead of weekend

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Jan. 11 (CNS Canada) – ICE Futures canola contracts were stronger on Friday, seeing a modest short-covering correction ahead of the weekend.

Gains in Chicago Board of Trade soybeans and soyoil contributed to the firmer tone in canola, while a slightly weaker tone in the Canadian dollar was also supportive.

However, a lack of significant end-user demand tempered the upside.

The lack of information from the United States Department of Agriculture (USDA) also kept some caution in the agricultural markets. Monthly USDA supply/demand numbers were supposed to be released on Friday, but remain delayed indefinitely due to the country’s partial government shutdown.

About 11,229 canola contracts traded on Friday, which compares with Thursday when 10,964 contracts changed hands. Spreading accounted for 5,458 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were stronger on Friday, as speculators bought back some of their recently sold contracts and adjusted positions ahead of the weekend.

Downward production estimates out of South America from a number of forecasters contributed to the gains.

However, concerns over Chinese demand tempered the upside as trade relations between the United States and China remain tenuous despite reportedly good talks earlier this week.

Ideas that African swine fever in China will cut sharply into soymeal demand from China’s large hog sector also put some pressure on values.

CORN futures were firmer, taking some direction from soybeans and wheat.

Corn plantings in Argentina are running slightly behind the year ago pace, at 86.1 per cent complete, according to a report from the Buenos Aires Grain Exchange (BAGE). However, crop conditions were generally looking favourable, with just over half of the corn that’s already emerged rating good-to-excellent.

China’s agriculture ministry estimated this year’s corn crop there at 257.33 million tonnes, which would be down by about 2 million tonnes from 2017/18.

WHEAT futures were stronger on Friday, seeing a correction after yesterday’s declines. U.S. wheat is said to be looking more favourably priced compared to Black Sea origin grain on the export markets. Recent weakness in the U.S. dollar index, which hit its weakest levels in three months today, contributed to the gains in wheat.

Argentina’s wheat crop was just over 95 per cent harvested, which was only slightly behind the year ago pace, according to BAGE.

Commodity Future Prices

Canola
2019-01-11 13:21
Price Change
Jan482.202.80
Mar483.302.80
May492.103.10
Jul499.803.20

Prices are in Canadian dollars per metric ton

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