By Phil Franz-Warkentin
Glacier FarmMedia MarketsFarm – The ICE Futures canola market was weaker on Wednesday, taking back most of Tuesday’s gains as the correction proved short lived and bearish technical signals kept values under pressure.
The most-active March contract remained well below most major moving averages, although chart support appeared to be holding to the downside as the recent weakness should be bringing in some end user demand.
Losses in Chicago soybeans and soyoil added to the softer tone in canola, although European rapeseed and Malaysian palm oil futures were up on the day.
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There were an estimated 32,562 contracts traded on Wednesday, which compares with Tuesday when 35,370 contracts traded. Spreading accounted for 16,574 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, with positioning ahead of Friday’s monthly supply/demand report from the United States Department of Agriculture behind some of the activity.
Friday’s USDA reports will include the agency’s updated estimates on Brazilian production, which will be followed closely. General expectations are for only minor revisions in the U.S. supply/demand numbers.
Brazil’s CONAB lowered their forecast on the size of the country’s soybean crop to 155.3 million tonnes on Wednesday, which compares with an earlier estimate of just over 160 million tonnes but would still be above last year’s record-setting 154.6 million tonnes.
Crop conditions in the South American country have shown some improvement recently, pressuring the futures.
CORN futures were lacking any clear direction, trading within a penny of unchanged on Wednesday.
Average trade guesses ahead of Friday’s report call for the USDA to hold U.S. corn yields steady at 174.9 bushels per acre. Large ending stocks are expected, but the carryout will likely slightly tighter than the 2.13 billion estimated in December.
CONAB lowered its forecast for Brazilian corn production by a million tonnes from an earlier forecast, now pegging the crop at 117.6 million tonnes.
WHEAT was mixed, with losses in Kansas City hard red winter wheat and gains in the Chicago soft wheat and Minneapolis spring wheat contracts.
Egypt bought 420,000 tonnes of wheat from Russia and Ukraine in yesterday’s tender, with U.S. wheat continuing to miss out on international business.
Friday’s USDA reports will include winter wheat seedings. A slight decline in overall U.S. winter wheat area from last year’s 36.7 million acres is expected.
