By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Jan. 6 – ICE Futures Canada canola contracts ended slightly higher after a day of choppy activity on Tuesday. The market was caught in between spillover support from the gains seen in Chicago soybeans, and pressure from the weakness in soyoil, brokers said.
Some of the gains were linked to technical buying by the funds, paired with only scale-up farmer selling. Farmer selling remains light, even though we are now in a new tax year, analysts said.
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Ongoing worries about unfavourable weather hurting Malaysian palm oil production was bullish, as was the weaker Canadian dollar.
On the other side, the large US soybean crop and generally favourable conditions for South American oilseeds were bearish.
About 24,026 contracts changed hands on Tuesday, which compares with Monday when 27,785 contracts traded. Spreading accounted for 8,536 of the trades.
Milling wheat, durum and barley were all untraded, though the Exchange adjusted wheat prices following Tuesday’s close.
CORN futures in Chicago ended slightly lower as new projections pointed towards record corn production for the 2014/15 season.
According to Informa Economics, US corn production could hit 14.425 billion bushels which would surpass last season’s record crop. Yields were pegged at 172.7 bushels an acre.
Corn received some strength from technical buying, said a trader, which helped to limit the losses.
SOYBEAN futures in Chicago rose three to 11 cents higher Tuesday on signs of increased demand for US supplies.
According to the USDA, private exporters secured 243,000 metric tonnes of soybean to China for delivery in 2015/16, which was bullish.
End-users have begun to purchase supplies from South America though, which did limit the upside.
The large global oilseed supply situation was also bearish. A new forecast from Informa Economics projects US soybean production at 3.969 billion bushels, which would be a new record.
SOYOIL futures ended mostly unchanged.
SOYMEAL futures ended higher taking their direction from soybeans.
WHEAT futures in Chicago and Kansas ended two to six cents per bushel higher Tuesday, as cold temperatures threatened winter wheat in the US Midwest.
Industry-watchers say this week’s snowfall in Illinois, Indiana and Ohio is likely too light to protect plants from the sub-zero temperatures that are expected.
US wheat remains expensive on the international stage, as evidenced by Algeria’s recent purchase of 450,000 tonnes of wheat from sellers in Europe, not the US.
– Farmers in Argentina sold more than US$300 million worth of grain and oilseeds in the last two days of 2014, according to a report. The country harvested a record soybean crop of 53.4 million tonnes last year, which exceeded the previous record.
– China is expected to focus on importing protein-rich wheat in a bid to boost supplies of higher quality grains, say industry-watchers.
– India’s wheat production could hit 100 million tonnes this year, according to the director of a wheat research organization in the country.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
