By Phil Franz-Warkentin, MarketsFarm
Winnipeg, May 28 (MarketsFarm) – ICE Futures canola contracts were up sharply on Tuesday, breaking out of their nearby trading range as a rally in Chicago Board of Trade grains and oilseeds provide support.
Weather concerns across the Midwest sparked the buying interest in the United States futures, with excessive moisture delaying corn and soybean seeding in the region.
Speculative short-covering added to the gains in canola, as some stops were hit on the way up.
Dryness concerns in parts of Western Canada were also supportive, with many areas in need of rain, according to a trader.
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However, large old crop supplies and the ongoing trade dispute with China limited the upside.
Europe’s COCERAL pegged this year’s European union rapeseed crop at 17.9 million tonnes, which would be down two million from the previous year.
About 31,197 canola contracts traded on Tuesday, which compares with Monday when 4,977 contracts changed hands. Spreading accounted for 18,286 of the contracts trade.
SOYBEAN futures at the Chicago Board of Trade were up sharply on Tuesday, as persistent planting delays across the Midwest sparked a speculative short-covering rally.
Weekly crop progress data was delayed due to yesterday’s Memorial Day holiday in the United States, but traders estimate that less than a third of the country’s soybean crop has been seeded to date as heavy rains continue to cause delays.
Usually soybean planting would be over 60 per cent done by the last week in May.
The weather had speculators continuing to cover their large net short positions.
However, uncertainty over trade relations between the U.S. and China kept some caution in the market.
CORN prices were up as well, hitting their highest levels in three years in some cases.
Corn seeding would normally be nearly complete across the U.S., but roughly a third of intended acres are still unseeded this year.
The likelihood of lost acres and reduced yields for later planted fields accounted for much of the strength.
Solid weekly export inspections of just over a million tonnes were also supportive for corn.
WHEAT was also up on the back of speculative short covering. Expectations for declining winter wheat crop ratings added to the firmer tone, with seeding delays for spring wheat also supportive.
