By Phil Franz-Warkentin
The ICE Futures canola market managed to show some independent strength on Wednesday, holding onto solid gains despite losses in the Chicago soy complex.
Dryness concerns across the Prairies, especially in Alberta and Saskatchewan, contributed to the gains as yields are unlikely to live up to earlier expectations.
Chart-based positioning was a feature, with the November contract testing resistance at C$800 per tonne.
However, sharp declines in Chicago soybeans and soyoil following the release of the United States Department of Agriculture’s monthly supply/demand report put some pressure on canola, keeping the Canadian oilseed off its highs for the day.
About 46,325 canola contracts traded on Wednesday, which compares with Tuesday when 33,757 contracts changed hands. Spreading accounted for 23,928 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, retreating from early gains as the market had a bearish reaction to updated supply demand estimates from the United States Department of Agriculture.
While accounting for the smaller acreage base in June’s planted area report, the USDA left its average yield estimate for soybeans unchanged at 52 bushels per acre – which would be above last year’s 49.5 bu/ac despite poorer condition ratings.
Total U.S. soybean production for 2023/24 was forecast at 4.30 billion bushels, down slightly from the June report, but above average trade guesses and the year-ago level.
Soybean ending stocks for the current marketing year were raised to 255 million bushels, from 230 million in June, with the new crop carryout at 300 million bushels well above average trade guesses closer to 200 million.
Hot and dry long-range forecasts are expected to cut into production going forward, with the likelihood of downward revisions to future USDA estimates providing some support.
CORN was also pressured by higher-than-expected production estimates from the USDA.
Average U.S. corn yields were lowered to 177.5 bu/ac, down by four bushels from June, but still well above last year’s 173.3 bu/ac. Total corn production at 15.32 billion bushels compares with 13.73 billion last year.
Corn ending stocks were forecast at 1.402 billion bushels this year and 2.26 billion next year.
WHEAT was lower across the board, following soybeans and corn.
The USDA raised its total wheat production estimate to 1.74 billion bushels, from 1.67 billion in June which would be up by about 90 million bushels on the year.
Wheat ending stocks for 2023/24 came in at the high end of trade expectations, at 592 million bushels. That compares with the 2023 carryout of 580 million bushels.
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