By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
WINNIPEG – ICE Futures Canada canola contracts were stronger on Wednesday, with the November contract breaking back above the psychological level of C$400 per tonne.
Spillover support came from the gains seen in Chicago soyoil, soybeans, as well as European rapeseed futures, analysts said.
Sentiment that the market was oversold added to the bullish tone, as did steady demand for the Canadian oilseed.
The need to keep a weather premium built into prices and recent weakness in the value of the Canadian dollar further underpinned prices.
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However, weather remains favourable for harvest activities in Western Canada and the US this week, which helped to limit the gains.
Talk that Canadian canola production will be larger than first anticipated was also bearish.
About 23,948 contracts traded on Wednesday, which compares with Tuesday when 23,772 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange upped milling wheat prices after Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade settled with small advances on Wednesday, as the market managed to see a modest short-covering correction.
End-user bargain hunting provided some additional support, although the upside was limited as the record production prospects continued to overhang the market.
Weather conditions across the Midwest remain favourable for harvest activity and for the development of later seeded fields. Early yield reports continue to beat expectations, and analysts said any gains were likely being seen as good selling opportunities.
SOYOIL futures were up on Wednesday, as gains in outside vegetable oil markets provided some support.
SOYMEAL futures were down on Wednesday, as adjustments to the soyoil/soymeal spread weighed on the commodity.
CORN futures in Chicago were up three to four cents per bushel on Wednesday, as updated long-range weather forecasts provided enough incentive for a small short-covering correction.
Parts of the Midwest are now forecast to see some rainfall next week, which would delay harvest operations.
However, the overall production prospects remain large, which limited the upside potential in corn.
WHEAT futures in Chicago were up one to four cents per bushel on Wednesday, amid ideas that US prices are starting to look more favourable to international buyers. Minneapolis futures were also up on the day, but the Kansas City hard red winter wheat contracts settled narrowly mixed.
Dryness concerns in other parts of the world, including Ukraine and Australia, were also a supportive influence, according to participants.
• Wheat production in the Mercosur bloc of Brazil, Argentina, Paraguay, and Uruguay is forecast to increase by 8.8%, to 22.2 million tonnes in 2014/15, according to a report from Brazil’s Trigo & Farinhas consultancy.
• Ukraine has harvested 7.8 million tonnes of grain in the 2014/15 season so far, which was up by 48% from the same point the previous year, according to a report from the country’s agriculture ministry. Wheat accounted for 4.4 million tonnes of the total. Ukraine’s total grain production is forecast at 63 million tonnes, with exports expected at roughly 30 million tonnes.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
