By Phil Franz-Warkentin and Dave Sims, Commodity News Service
Winnipeg, July 9 – ICE Futures Canada canola contracts were up sharply on Thursday, as a rally in the CBOT soy complex provided spillover support.
Uncertainty over the size of this year’s crop, given the persistent drought concerns in Western Canada, contributed to the firmer tone in canola, according to participants. The production concerns were heightened on Thursday by forecasts that are generally looking hot and dry into the next week.
Reduced concerns over the economic situation in China and the resulting gains in the outside financial, energy, and vegetable oil markets, contributed to the firmer tone in canola, said traders.
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On the other side, technical resistance did slow the advances to some extent, amid ideas that canola is looking overpriced compared to other options. Modest strength in the Canadian dollar was also somewhat bearish, although the currency has lost considerable ground to its US counterpart in recent days.
About 14,877 canola contracts were traded on Thursday, which compares with Wednesday when 15,616 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
SOYBEANS posted solid gains on Thursday, rising 23 to 29 cents per bushel, supported in large part by expectations of lower production numbers in Friday’s USDA World Agricultural and Supply Demand Estimates. Excess rain across much of the Midwest has flooded out many fields and kept farmers from seeding.
As well, new reports that the Chinese economy isn’t as badly off as first thought, was also bullish.
Improved equity markets were also beneficial to soybean trading, said an analyst.
SOYOIL futures in Chicago ended 68 to 72 points higher.
SOYMEAL futures were also stronger on the day.
CORN futures on the Chicago Board of Trade finished four to five cents per bushel higher Thursday on expectations Friday’s USDA report will forecast lower production of corn in the US.
Steady rains in the US Midwest also continue to leach nutrients from the crop and lower quality, an analyst said.
The situation in the western half of the Midwest is said to be significantly better and there are ideas much of the corn coming from there will be fine.
Wheat futures on the Chicago Board of Trade inched upward Thursday, enjoying spillover support from corn and soybeans. Minneapolis and Kansas City contracts, meanwhile, were steady to lower.
Bargain hunters stepped into the market on ideas supplies had been oversold.
However, fierce international competition continued to cut into US exports which have repeatedly been weighed down by strength in the US dollar. Just as one example, Egypt purchased wheat from Russia and Ukraine this week instead of the USA.
– A strike by an agency which inspects the quality of agricultural products in Argentina, has the potential to snarl grain imports for 10 days, according to a report. The strike is scheduled to begin on July 15.
– Turkey has purchased 117,000 tonnes of soft wheat, traders say.
– About two-thirds of Australia is expected to experience a strong cold front this weekend, according to weather reports. Cold winds, hail and even frost are expected in some areas.
