By Glen Hallick, MarketsFarm
WINNIPEG, March 28 (MarketsFarm) – ICE Futures canola contracts were stronger at the end of trading on Thursday, as a large amount of short trading provided a bounce in bids.
Also support came from traders who are preparing for tomorrow’s United States Department of Agriculture quarterly reports on Prospective Planting and Grain Stocks.
Although there hasn’t been any positive news coming out of ongoing tensions between Canada and China, a Winnipeg-based trader commented that a lack of negative news provided support.
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The Canadian dollar was down at 74.39 U.S. cents by mid-afternoon on Thursday, which provided some support.
And there is support coming from spring road bans on the Canadian Prairies, which have limited farmer deliveries, as well as from the belief that farmers may plant less canola this spring.
With moderate to major flooding in about half of the continental United States, farmers there may change their planting intentions from corn to soybeans. Such would weigh on canola values.
Canola exports fell in January to a 16-month low. Approximately 233.2 million tonnes of canola were exported from Canada, with about a third going to China. Those exports to China were down 28.5 per cent from November, and since January, there have been few, if any, new sales to China.
About 16,290 contracts were traded on Thursday, which compares with Wednesday when approximately 13,555 contracts changed hands.
SOYBEAN futures at the Chicago Board of Trade were stronger on Thursday.
United States/China trade talks got off with a positive note on Thursday. China offered to make a major concession on technology transfers, and the U.S. offered to lift some of the tariffs on Chinese imports. However there are still several other trade issues needing to be resolved. Trade talks will continue Friday in China, and then resume next week in the U.S.
There will be moderate to major flooding in 25 U.S. states this spring. A slow spring thaw has helped some areas, but Iowa and Nebraska are among many states that have already incurred billions of dollars in damages. As flooding continues, it will become more likely that U.S. farmers could switch from corn to planting soybeans.
The U.S. Department of Agriculture releases two reports on March 29, its Prospective Planting report and its Grain Stocks report. Traders have been positioning themselves ahead of Friday.
CORN futures were also stronger on Thursday.
U.S. corn exports for the week ended March 21 amounted to 904,500 tonnes, which was in line with trade estimates. There were 85,400 tonnes of new sales.
However, the Brazil real and the Argentina peso fell against the U.S. dollar, which hurt U.S. competitiveness.
Ahead of Friday’s USDA report, corn stocks in the U.S. have been projected at 328.2 million tonnes. That would be well down from the 350.1 million tonnes in 2018.
WHEAT futures were weaker on Thursday due to a lack of fresh supportive news and the U.S. having a good supply. Also, gains by the U.S. dollar weighed on values.
There have been indications of North Dakota farmers planting less spring wheat this year as they look to higher priced crops.
