By Phil Franz-Warkentin, MarketsFarm
Winnipeg, Dec. 4 (MarketsFarm) – The ICE Futures canola market settled with small losses on Wednesday after posting gains for most of the session.
While strength in the Chicago Board of Trade soy complex was supportive, a rally in the Canadian dollar tempered any upside potential in canola, according to participants. The currency strengthened by roughly half of a cent relative to its United States counterpart following gains in crude oil and comments from the Bank of Canada.
Statistics Canada releases updated production estimates on Friday, and positioning ahead of the report accounted for some of the activity. Market opinions are divided on whether canola production will be up or down from the 19.4 million tonnes forecast in September in the updated survey data.
About 30,544 canola contracts traded on Wednesday, which compares with Tuesday when 22,707 contracts changed hands. Spreading accounted for 20,632 of the contracts traded as traders were busy rolling their positions out of the front month.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday as China and the United States were once again reportedly close to reaching an agreement on Phase One of a trade deal. However, investors continued to take any trade talk with a large grain of salt.
A rally in crude oil was supportive for the vegetable oil markets in general, with a larger than expected drop in U.S. oil inventories and ideas that OPEC and its allies would be cutting output driving that market.
Large South American crop prospects tempered the upside in soybeans.
CORN was lower, despite the gains in soybeans and crude oil.
About 10 per cent of the U.S. corn crop is still unharvested, but the ongoing harvest delays may be priced into the futures for the time being.
The latest U.S. ethanol data showed a slight 1,000 barrel per day increase in the last week of November, with plants in the country producing 1.06 million barrels of the renewable fuel a day.
WHEAT futures were higher, with speculative positioning a feature.
Egypt bought nearly 300,000 tonnes of Russian wheat in its latest tender, bypassing the U.S. once again.
Average trade guesses are calling for a slight increase in Canadian wheat production in Friday’s Statistics Canada report from the 32.5 million forecast in September. However, poor harvest weather likely hurt the quality of the crop.
Futures Prices as of December 4, 2019
Prices are in Canadian dollars per metric ton