By Phil Franz-Warkentin, MarketsFarm
Winnipeg, May 14 (MarketsFarm) – ICE Futures canola contracts were stronger on Tuesday, taking some direction from Chicago Board of Trade soybeans and soyoil.
The slow pace of spring seeding in the United States Midwest sparked a rally in the Chicago grain and oilseed markets, which encouraged some speculative short-covering in the Canadian market as well, according to a trader.
Dryness concerns in parts of Western Canada were and forecasts calling for colder Prairie temperatures into the end of May were also supportive.
Some technical stops were hit on the way up, which added to the firmer tone. However, the longer-term downtrend remains intact, and canola settled well off its highs for the day.
Ongoing uncertainty over trade relations with China also kept some caution in the canola market.
About 26,237 canola contracts traded on Tuesday, which compares with Monday when 22,847 contracts changed hands. Spreading accounted for 13,888 of the contracts trade.
SOYBEAN futures at the Chicago Board of Trade were up sharply on Tuesday, seeing a corrective bounce after hitting 10-year lows on Monday.
The United States soybean crop was only nine per cent seeded in the latest weekly report, which compares with the five-year average for this time of year of 29 per cent.
U.S. President Donald Trump announced plans to provide up to US$15 billion worth of aid to farmers hurt by the trade dispute with China.
While the back-and-forth tariffs between the two countries are still causing some uncertainty in the market, the latest comments out of both sides were taken as somewhat optimistic by traders.
CORN futures were stronger, as the market reacted to the slow pace of spring seeding.
The U.S. corn crop was only 30 per cent seeded as of this past Sunday, which was well off the average pace for this time of year of 66 per cent done.
With more rain in the forecasts, the planting window is quickly closing and there are ideas that acres won’t live up to earlier expectations.
WHEAT futures were higher, finding some spillover support from the rally in corn as traders covered short positions.
The U.S. winter wheat crop was 42 per cent headed as of this past Sunday, which was behind the average of 54 per cent. The crop was rated 64 per cent good to excellent.
The U.S. spring wheat crop was 45 per cent seeded in the latest report, which was roughly double what was done the previous week. While seeding was still running behind normal, the jump on the week beat trade expectations and served to limit the upside in the Minneapolis futures.