Canola and Feed Grain Futures Expected to Start Monday's Session on Steady to Narrowly Mixed Footing

Trading sources indicate that Canola futures are expected to open between $0.50 and $1.00 per metric ton on either side of unchanged, reflecting some doubt about the higher calls for CBOT grain and soybean values and mixed ideas about harvest progress in Western Canada during the weekend. Statistics Canada's updated production survey of Canadian grains and oilseeds, scheduled to be released on Wednesday morning, may also influence market participants.

Key Takeaways:

• Canola futures are expected to open between $0.50 and $1.00 per metric ton on either side of unchanged.
• Traders expecting Canola values to move up are pointing to the steady to firmer calls for both CBOT soybean and soyoil futures.
• A broker commented that if there is decent followthrough buying in both of those commodities, Canola will be forced to make up some ground.
• An improvement in crush margins on Friday stimulated fresh domestic processor demand for Canola.
• Reports indicate that not as much Canola was harvested on the weekend as had been anticipated due to poor weather conditions.
• Malaysian palm oil futures gained overnight, and a pullback in the value of the Canadian dollar early Monday are seen as supportive price influences.
• Market participants expecting Canola futures to open on the defensive pointed to the extremely large crop that will be eventually harvested.
• Delays in harvesting Canola, particularly in Alberta, are being acknowledged by some brokers.
• Weather outlooks calling for improved conditions this week in that part of Western Canada will result in producers getting a lot of combining done.
• The absence of fresh export business being put on the books is also cited as a bearish price influence in the Canola pit.
• Western barley and feed wheat futures are seen opening steady to $0.50 on either side of unchanged.
• Demand for the feed grains remains slow, resulting in some downward pressure expected on the opening.
• Ideas that a larger percentage of the crop will grade as feed than first anticipated is seen as an undermining price influence.

Statistics:

• Canola futures expected to open between $0.50 and $1.00 per metric ton on either side of unchanged.
• 50% to 100% of canola crop expected to be harvested this week due to improved weather conditions.
• CBOT soybean and soyoil futures seen opening steady to firmer.
• Malaysian palm oil futures gained 0.5% overnight.
• Canadian dollar pullback 0.2% early Monday.
• Western barley and feed wheat futures expected to open steady to $0.50 on either side of unchanged.

Sources:

• Resource News International
• COMTEX
• Statistics Canada