By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
March 25, 2014
Winnipeg – ICE Futures Canada canola contracts were stronger on Tuesday, boosted by follow-through commercial and speculative buying interest after Monday’s bounce higher.
Exporters were said to be good buyers, as reports that Pakistan had purchased 90,000 tonnes of canola on Monday were seen as a sign that prices were attractive in the international market.
Speculators were also on the buy side, with fund traders adding to their newly created net long positions, according to a broker. He estimated that the funds were holding a net long position of about 5,000 contracts heading into Tuesday’s session.
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Losses in CBOT soyoil, only lackluster gains in soybeans, and a firmer tone in the Canadian dollar did serve to temper the upside potential in canola, according to participants. Canada’s large supply situation and the lingering logistics issues in many areas also kept some pressure on the market.
About 20,243 canola contracts were traded on Tuesday, which compares with Monday when 18,127 contracts changed hands. Spreading accounted for 16,364 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following Monday’s close.
WHEAT futures in Chicago declined one to six cents on Tuesday, as a new report from the US Department of Agriculture showed Kansas crop ratings declined by less than expected, despite the recent bout of dry weather.
The situation could change soon though as no rain is forecast in the next week for the southern plains. Kansas is the biggest producer of winter wheat in the US.
According to an analyst, investors also squared positions ahead of a major government crop report due next week.
SOYBEAN futures at the Chicago Board of Trade were relatively unchanged Tuesday, settling two to four cents higher, as a new report lowered the acreage output for soybeans while raising the estimate for wheat.
US soybean acres were listed at 81.204 million in the report compiled by Informa Economics, down from an earlier estimate of 81.264 million acres, but still above the 76.5 million seeded in 2013. The USDA releases its prospective planting report on March 31.
Investors weighed signs of tight supplies left over from the past U.S. harvest against planting, said an analyst.
SOYOIL futures were slightly lower on Tuesday, following the continued downturn in Malaysian palm oil which put continued pressure on values.
SOYMEAL futures rose one to two dollars U.S. on Tuesday following soybeans. Speculators remain long soymeal, with tight supplies in the Midwest also supportive, said an analyst.
CORN futures in Chicago fell one to four cents Tuesday as investors bet that warmer weather in the next 10 days will allow some US farmers to begin field-work ahead of planting.
A burst of arctic air in the US Midwest is expected to move out by the weekend and temperatures will warm enough to soften soils, said an analyst.
– Strong winds and heavy rainfall flattened the standing wheat crop in three key districts in India. So far there are no official reports of losses.
– All signs point to normal export operations in Ukraine, according to US Wheat Associates market analyst Casey Chumrau. The country has already shipped more than 76% of its 2013/14 crop, according to Global Trade Atlas.
– A new report by the World Bank says China’s population is increasingly shifting to the cities. Analysts in Australia say the move signals a relative decline in the Chinese farm sector, and a rise of wealthy Chinese residents demanding quality food.
Settlement prices are in Canadian dollars per metric ton.
