By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Jan. 5 – ICE Futures Canada canola contracts ended stronger on Monday. The March contract broke above the resistance level of C$450 per tonne during the session, but failed to settle higher than the key chart point.
Much of the strength was linked to spillover support from the gains seen in Chicago soybeans, soyoil and European rapeseed futures.
Weakness in the Canadian currency, as it fell below 85 cents US on Monday, was also bullish, as it made canola more attractive to crushers and exporters.
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Further support came from steady commercial demand and ongoing worries about unfavourable monsoons damaging Malaysian palm oil crops.
However, canola was lagging soybeans to the upside, as it moved higher while the Chicago futures moved lower on Friday.
Continued good weather for many South American soybean growing regions and expectations that Canadian farmers will start to sell more products now that we’ve entered a new tax year were also bearish.
About 27,785 contracts changed hands on Monday, which compares with Friday when 7,999 contracts traded. Spreading accounted for 10,960 of the trades.
Milling wheat, durum and barley were all untraded. Though, the Exchange moved wheat prices higher and durum lower, after Monday’s close.
Corn futures in Chicago ended nine to ten cents per bushel higher with talk of increased demand for US dried distillers’ grains from China and other countries.
Cold weather in the US Midwest is also expected to raise demand for animal feed.
Snow is expected to fall this week in the Midwest which could discourage some farmers from moving their corn out of storage, according to a trader.
Soybean futures in Chicago rose 31 to 37 cents per bushel higher Monday, on ideas that Friday’s losses were overdone and fresh signs of dryness in Brazilian soybean fields. Dry conditions are expected to set in over the coming week which could further hamper development of the crop, said analysts.
Demand continues to be steady for US supplies as evidenced by a recent 233,000 tonne order from China, according to a report.
However, the large US soybean crop was weighing on values, limiting the gains.
SOYOIL futures ended 75 to 79 points higher tracking soybeans.
SOYMEAL futures also ended higher on ideas of growing demand for animal feed due to colder conditions in the US.
WHEAT futures in Chicago ended five to seven cents per bushel higher Monday as traders went bargain hunting on the first full week of trading in the New Year.
A snap of cold air across part of the US Midwest also sparked talk of potential crop damage among winter wheat.
According to the USDA, China bought 120,000 tonnes of hard wheat from the US and Australia in the past few days, which was supportive.
– Serbia expects the yield of common wheat in 2015 to be between 2.3 and 2.5 million tons, according to a report.
– Egypt expects to receive all the Russian wheat it bought for January delivery after assurances from Moscow that steps taken to cool domestic prices would not hit supplies to the world’s biggest wheat buyer, said a government official.
– Rains in northern and central India have helped quench some wheat crops suffering from dryness, said an industry-watcher.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
