NEW RECORD CANOLA VOLUME = 89,506.
Friday’s parabolic gains were all about the spec short position getting out tied to the sharp gains elsewhere, believe trend funds were active given the record volume trade, buying back 18,000 contracts, leaving them short 20,000 contracts in November. Don’t believe there was much fundamental buying, leaving strength as technically driven, although board crush margins hit new rally highs. Hedges were active on a scale-up and then weighed on prices despite outside markets holding sharp gains. The farmer to no surprise, rewarded this week’s price surge with new sales. Commercial hedges will ultimately replace the shrinking fund short.
Global wheat futures finished the week higher once again on Friday as weather concerns in the US and funds unrolling a massive short combined to send CBOT(N) +26.50 for the day and +57.75c for the week.
The dry story unfolding in the US Midwest shows nearly all of the cropping areas currently under at least some sort of dry/drought due to the rain deficit over the past 4 weeks.
The 8-day forecast for Australia remains mostly dry with only VIC once again looking to receive rains over the course of the week. The 3-month BOM outlook predicts below median rainfall as likely to very likely for most areas.
Black Sea wheat is starting to find homes in SEA at CFR/CIF prices in the $260s and seems disconnected (for now) from the recent rally in Matif and CBOT.
Matif -1
Canola -2
Rapeseed -10
CAD -8