By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, April 21 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, as the ongoing rally showed no signs of slowing down.
Tight old crop supplies, uncertainty over new crop weather, and a rally in Chicago Board of Trade soyoil all contributed to the firmer tone in canola.
The May futures hit a new record high for the front month contract, trading at C$880.10 per tonne at one point before running into some resistance.
Sharp gains in the Canadian dollar after the Bank of Canada’s latest interest rate announcement put some pressure on values, as the rising currency cuts into crush margins and makes exports more expensive for global buyers.
Statistics Canada releases its first survey-based acreage estimates next week Tuesday. Traders generally expect to see increased canola area on the year, but the extent of the increase remains to be seen as competition from other crops and agronomic factors will limit plantings.
About 21,214 canola contracts traded on Wednesday, which compares with Tuesday when 28,465 contracts changed hands. Spreading accounted for 12,282 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, hitting their highest levels in seven years as cold United States weather and solid world demand for vegetable oil provided support.
The U.S. Department of Agriculture’s Ag Attaché lowered its forecast for soybean production in Argentina by 2.5 million tonnes, to 45 million.
The Chinese government released updated guidelines on livestock feeding, calling for reductions in soymeal and corn in the rations. While that did weigh somewhat on soymeal, the broad strength in world vegetable oil markets kept beans well supported with soyoil hitting its strongest levels in 10 years at one point.
CORN hit eight-year highs during the session, as cold weather across the Midwest causes seeding delays and slows the emergence of already planted fields.
Dryness in Brazil for the second corn crop there was also supportive.
WHEAT futures were higher in sympathy with corn and soybeans.
Cold U.S. temperatures were underpinning the Chicago and Kansas City winter wheat contracts, while dryness in the North American spring wheat growing regions underpinned the Minneapolis futures.
Canadian wheat acres are expected to be down on the year, which added to the firm tone.
Futures Prices as of April 21, 2021
Prices are in Canadian dollars per metric ton