By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Nov. 30 (CNS Canada) – ICE Futures Canada canola contracts were mostly lower at Thursday’s close, as declines in Chicago Board of Trade soybeans and soyoil spilled over to weigh on values.
An announcement by the U.S. Environmental Protection Agency (EPA) that it would keep its renewable fuel targets largely unchanged in 2018 provided the catalyst for the downturn in the oilseed markets, according to traders. While the lack of cuts to the biofuel standards should be supportive in the long run, there had been some optimism built up in the futures that the targets might be raised.
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Weakness in the Canadian dollar provided underlying support for canola, with both exporters and domestic crushers continuing to show solid demand.
Statistics Canada releases its final production estimates of the year on December 6, and positioning ahead of that report remained a feature. Average trade estimates on the size of the canola crop come in at around 20 million tonnes.
About 19,989 canola contracts traded on Thursday, which compares with Wednesday when 23,093 contracts changed hands. Spreading accounted for 11,254 of the contracts traded.
The U.S. Environmental Protection Agency kept its biofuel targets for 2018 relatively unchanged on the year in an announcement Thursday morning. CBOT soyoil was higher ahead of the announcement, but quickly dropped when there was no bullish surprise in the EPA targets.
Weekly U.S. soybean export sales came in at 943,000 tonnes. While the sales were down on the week, additional export business of 650,000 tonnes to China and other unknown destinations was somewhat supportive.
Corn posted small gains, as end user bargain hunting helped the grain see a continued recovery off of its nearby contract lows.
The USDA announced weekly US corn export sales of 599,000 tonnes, which were well off last week’s level as the Thanksgiving holiday kept the market somewhat quiet.
Wheat was mixed, with a firmer tone in Minneapolis spring wheat and losses in Chicago. Chart-based positioning was a feature, as the underlying fundamentals remain relatively bearish.
Weekly U.S. wheat export sales came in at only 184,000 tonnes, which were well off trade guesses as the U.S. continues to miss out on export opportunities to cheaper priced wheat from elsewhere in the world.
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