By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 11 (MarketsFarm) – The ICE Futures canola market was mixed on Tuesday, with sharp losses in the old crop July contract and a firmer tone in the new crop months in trade that was described as choppy and volatile.
Increased farmer hedges, as price targets were met in the countryside, accounted for some of the selling pressure. Chart-based selling and recent strength in the Canadian dollar added to the losses in the July contract, as fund traders bailed out of long positions rolled into November.
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Tight old crop supplies, dryness concerns across Western Canada and spillover from advances in the Chicago Board of Trade soy complex all provided some underlying support.
About 31,975 canola contracts traded on Tuesday, which compares with Monday when 25,515 contracts changed hands. Spreading accounted for 12,414 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Tuesday, seeing some ‘turnaround Tuesday’ buying interest after Monday’s losses as investors adjusted positions ahead of Tuesday’s monthly United States Department of Agriculture supply/demand report.
Downward revisions to U.S. soybean stocks are generally anticipated in the report, with the firs production estimates for the 2021/22 crop likely to draw most of the attention.
Seeding progress is running well ahead of average across the U.S., with 42 per cent of intended soybean acres in the ground as of this past Sunday.
CORN futures had been down with profit-taking in overnight activity, but moved higher as the day progressed as the advances in soybeans provided spillover support.
Dryness concerns out of Brazil remained a key driver of the corn market, as the ongoing lack of moisture cuts into the yield prospects for the second crop there.
However, favourable seeding conditions across the U.S. Midwest did temper the gains, with 67 per cent of intended corn acres in the ground as of this past Sunday. That compares with the five-year average of 52 per cent done.
WHEAT futures were up in sympathy with corn and soybeans, seeing a recovery from yesterday’s losses.
U.S. winter wheat condition ratings saw a slight improvement on the week, moving up one point in the good-to-excellent category to 49 per cent.
Spring wheat seeding was 70 per cent done in the U.S., which was well ahead of the 51 per cent average. However, drought concerns in some of the key spring wheat regions of the northern U.S. and Canada remained supportive.
