By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Feb. 7 (MarketsFarm) – The ICE Futures canola market settled narrowly mixed at Friday’s closing bell after posting losses for most of the session.
Spillover from declines in Chicago Board of Trade soyoil and ample supplies in the commercial pipeline weighed on prices throughout the day, according to participants.
However, canola remains cheap compared to other oilseeds. Speculative positioning and end-user bargain hunting provided support.
The Canadian Grain Commission pegged visible canola supplies, as of Feb. 2, of 1.5 million tonnes. Exports remained well behind the previous year’s pace, but increased domestic usage more than made up for the shortfall.
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About 27,184 canola contracts traded on Friday, which compares with Thursday when 20,345 contracts changed hands. Spreading accounted for 20,152 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade held narrowly rangebound on Friday, settling with small gains in the most active front months.
Traders were still trying to get a handle on the impact the coronavirus outbreak will have on the global economy.
The market was waiting for China to come in and buy more soybeans from the United States as part of the Phase One trade agreement, especially as China announced it would be cutting some tariffs on U.S. imports. However, the availability of cheaper Brazilian crops may limit that demand.
The Brazilian harvest is moving forward, and will soon be displacing U.S. beans on the global market.
Positioning ahead of the Feb. 11 monthly supply demand report from the U.S. Department of Agriculture accounted for some of the activity. Average trade guesses call for a reduction in the U.S. soybean ending stocks forecast, but slightly higher world stocks.
CORN was moved higher on Friday, with pre-weekend positioning the feature.
Average trade guesses predict a slight downward revision to the U.S. corn ending stocks estimate in next Tuesday’s World Agriculture Supply and Demand Estimates (WASDE) report from the USDA.
WHEAT futures were stronger, with speculative positioning behind some of the activity. World and U.S. wheat stocks are both expected to be revised lower in next week’s USDA report.
However, strength in the U.S. dollar put some pressure on values as the rising currency makes U.S. wheat exports more expensive for international buyers.
