By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Dec. 10 (MarketsFarm) – The ICE Futures canola market was weaker on Thursday, retreating from early gains as the North American agricultural markets reacted to the latest supply/demand estimates from the United States Department of Agriculture.
The USDA lowered its projection for U.S. soybean ending stocks to 175 million bushels, from 190 million in November. Both canola and soybeans had been posting solid gains ahead of the report, but the downward revision failed to live up to expectations and prices turned lower.
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Chart-based selling added to the declines in canola, as speculators booked profits and values backed away from nearby technical resistance. Strength in the Canadian dollar was another bearish influence in the background.
However, solid end user demand and the need to ration canola supplies going forward provided underlying support.
About 43,916 canola contracts traded on Thursday, which compares with Wednesday when 48,172 contracts changed hands. Spreading accounted for 39,220 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Thursday, as the market reacted to the latest supply/demand estimates from the United States Department of Agriculture.
After posting large gains ahead of the USDA report, the release of the actual numbers sparked a ‘buy the rumour, sell the fact’ reaction in soybeans.
The USDA pegged soybean ending stocks for 2020/21 at 175 million bushels, which was down by 15 million from the November estimate due to an upward revision in the domestic crush. While that would be the tightest soybean situation in a number of years, pre-report expectations had been for an even smaller carryout and soybeans gave up their early advances.
Improving moisture conditions in South America also put some pressure on values, although more precipitation will be needed going forward.
CORN also moved lower after the report. The USDA left its U.S. corn ending stocks projection unchanged at 1.7 billion bushels, and the lack of any fresh news to feed the bullish market saw prices drift lower.
However, solid export demand provided some support, with weekly U.S. corn export sales of 1.3 million tonnes and an additional 344,000 tonne sale to Mexico reported.
WHEAT futures were higher on the day, as tightening world and U.S. stocks projections provided support.
World wheat stocks were cut by nearly four million tonnes from an earlier forecast, to 316.5 million tonnes. U.S. wheat ending stocks, at 862 million bushels, compare with the November estimate of 877 million.
Weekly U.S. wheat export sales topped trade expectations, coming in at just over 600,000 tonnes.
