Canada Markets

November canola trade consolidated within last week's trading range, as seen on the attached weekly chart, failing to test last week's high this week. The contract did, however, post an $11.60 per metric tonne gain over the course of the week, a move also seen in the soybean market while soybean oil posted a loss over the course of the week.

As seen in the lower study of the attached chart, commercial traders are growing increasingly bullish despite calls for a record soybean crop in the United States. The November/January spread (black line) narrowed $3/mt to a $3.30/mt carry this week, a narrow spread which represents approximately 31% of full carry and could be viewed as bullish. This is the narrowest this spread has traded since mid-July. Narrowing basis on the Prairies earlier in the week also signals increased commercial interest.

Week 10 grain statistics from the Canadian Grain Commission indicate that while the year-to-date domestic crush is just slightly behind the steady pace needed to achieve the 7.1 mmt crush target set by Agriculture and Agri-Food Canada, the year-to-date export program is 189,000 mt ahead of the steady pace required to meet the 8.4 mmt target set by AAFC. Year-to-date exports, at 1.8 mmt (licensed facilities only) are 44.8% above year-ago levels.

Dow Jones commentary reported today suggested that weak producer selling remains a supportive feature in current markets. Maybe so, although week 10 producer deliveries into the primary elevator system for the week ending October 12 were the third highest seen so far this crop year. Cumulative deliveries totaled 3.554 mmt, 1.1 mmt above last year and close to 870,000 mt above the average cumulative deliveries seen over the past three years.

DTN 360 Poll

Have markets bottomed? We'd love to know what you think. Please look for the poll on your DTN Home Page.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.