By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Jan. 7 – The ICE Futures Canada canola market was firmer on Wednesday, taking some direction from the gains seen in Chicago soyoil futures. Though, the March contract was lagging to the upside as traders were wary of pushing it above the key C$450 per tonne resistance level, analysts said.
The sharply lower Canadian dollar was also bullish, as it made canola more attractive to crushers and exporters. At Wednesday’s canola market close, the loonie was down about 20 points at the 84.36 cents US mark.
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Continued strong demand for Canadian canola further underpinned values, as did ongoing worries about untimely monsoons damaging Malaysia’s palm oil crop.
However, some spillover pressure came from the weakness in Chicago soybean futures.
Light farmer selling at the highs was also bearish, as were generally favourable conditions for South American soybean crops.
About 21,569 contracts changed hands on Wednesday, which compares with Tuesday when 24,026 contracts traded. Spreading accounted for 10,280 of the trades.
Milling wheat, durum and barley were all untraded, though the Exchange moved wheat prices lower after Wednesday’s close.
CORN futures in Chicago ended eight cents per bushel lower Wednesday as new data showed a continued rise in inventories of US ethanol, and slowing demand for corn from the industry. According to the USDA, inventories jumped four percent in the week ended January 2.
The market is also still grappling with yesterday’s forecast by a private firm predicting 2014/15 corn production would reach a massive 14.425 billion bushels.
Conditions for the corn crop in South America are “very good” according to a report, leading many analysts to conclude the market will soon become more crowded.
SOYBEAN futures in Chicago ended mixed Wednesday with near-term values enjoying support from dry weather in South America while traders took profits in some of the more deferred positions. Values were anywhere from three cents per bushel lower to two cents higher.
Dry weather in both Brazil and Argentina has begun to worry local growers who fear it will delay development of the plants.
China has reportedly begun to look at buying more supplies from South America, which was bearish.
SOYOIL futures ended 27 to 29 points higher in sympathy with Malaysian palm oil.
SOYMEAL futures ended slightly lower with spreading against soyoil a feature.
WHEAT futures in Chicago ended 11 to 12 cents per bushel lower Wednesday as strength in the US dollar kept a lid on exports of American wheat.
Some areas of the US Midwest received snow which some experts say will help winter wheat supplies deal with expected low temperatures.
– Many of Australia’s key growing areas got some welcome respite from prolonged dry weather to end 2014 in December with ‘above average’ rainfall for much of the region, according to a report.
– India’s wheat crop could hit record production in this crop year to June, say industry-watchers. Some analysts say output could reach 100 million metric tonnes but are unsure of how much wheat would be saved for domestic consumption.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
