By Phil Franz-Warkentin, MarketsFarm
Winnipeg, March 8 (MarketsFarm) – ICE Futures canola contracts were stronger on Friday, as speculative short-covering and end user bargain-hunting provided some support in light trade ahead of the weekend.
After dropping sharply earlier in the week, canola was looking cheap and due for a correction, according to participants.
However, the bearish underlying fundamentals tempered the upside. Political tensions between China and Canada weighed on prices, as traders remain concerned over declining demand from the major customer.
Losses in Chicago Board of Trade soybeans also put some pressure on values.
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About 11,933 canola contracts traded on Friday, which compares with Thursday when 19,750 contracts changed hands. Spreading accounted for 7,394 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Friday.
The United States Department of Agriculture lowered its soybean carryout projection for the current marketing year by 10 million bushels, to 900 million bushels. That was in line with trade expectations but still roughly double the ending stocks from the previous year.
The agency pegged Brazil’s soybean crop at 116.5 million tonnes, which would be down by half a million tonnes from the February estimate and 4.3 million below the previous year’s level.
The USDA announced private export sales of 664,000 tonnes of soybeans to China this morning, confirming rumours from Thursday afternoon.
While the fresh business was supportive, the continued lack of progress on trade negotiations between the U.S. and China kept the overall bias pointed lower. A planned meeting between the leaders of the two countries is now reportedly being pushed back.
CORN futures were weaker on the day. The USDA raised its projection for corn ending stocks to 1.835 billion tonnes, topping trade estimates that had generally called for a steady reading from the 1.735 billion forecast in February.
However, the world corn carryout was lowered by about a million tonnes, to 308.53 million tonnes.
WHEAT futures were mixed, with losses in Minneapolis spring wheat and gains in the winter wheats as the spreads saw some adjustment ahead of the weekend.
U.S. wheat ending stocks were raised by 45 million bushels, to 1.055 billion, topping trade expectations.
The USDA raised the world wheat carryout by three million tonnes, to 270.53 million tonnes. That was still well below the 280 million tonne carryout from the previous year.
