By Phil Franz-Warkentin, MarketsFarm
Winnipeg, May 31 (MarketsFarm) – ICE Futures canola contracts held onto small gains on Friday, as improving technical signals kept speculators on the buy side covering their large net short positions.
Weakness in the Canadian dollar and dryness concerns in parts of the Prairies were somewhat supportive.
A slight decline in visible supplies in the commercial handling system in the latest Canadian Grain Commission report was also supportive. However, exports were disappointing, with the 85,100 tonnes moved during the week coming in well below the 275,200 tonnes seen the previous week.
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Large old crop supplies and the ongoing trade dispute with China also tempered the upside. Losses in Chicago Board of Trade soybeans and renewed concerns over global trade were also bearish, with United States President Donald Trump now threatening to place tariffs on Mexican imports.
About 18,181 canola contracts traded on Friday, which compares with Thursday when 25,313 contracts changed hands. Spreading accounted for 9,316 of the contracts trade.
SOYBEAN futures at the Chicago Board of Trade were lower on Friday as the market took back some of its recent gains ahead of the weekend.
United States farm exports are expected to be down by 4.5 per cent in 2019, due to low prices and the trade war with China, according to a quarterly forecast from the U.S. Department of Agriculture.
The agency forecast total exports of US$137 billion, which would be the lowest since 2016. Soybean exports are forecast at US$17 billion, down by about four billion dollars from the previous year
Persistent seeding delays across the Midwest remained supportive, although ideas that some intended corn acres will still shift into beans weighed on values.
CORN was down on Friday amid increasing global trade worries.
U.S. President Donald Trump unexpectedly announced a plan to impose a five per cent tariff on all imports from Mexico, which should lead to retaliation from the country. The tariff is set to rise to 25 per cent in October.
The latest trade dispute also raises questions over the new NAFTA agreement.
WHEAT settled lower after running into upside resistance.
The International Grains Council pegged world wheat ending stocks for 2019/20 at 276 million tonnes, which would be up by two million from an earlier estimate.
Declining condition ratings in the U.S. Plains due to excessive moisture were supportive for wheat, with harvest delays also a possibility.
