By Phil Franz-Warkentin, Commodity News Service Canada
April 20, 2015
Winnipeg – ICE Futures Canada canola contracts were stronger on Monday, taking some direction from the firmer tone in the CBOT soy complex.
With no real fresh fundamental news, the activity was largely technical in nature and the gains in CBOT soybeans helped canola see a continued bounce off of last week’s lows, according to participants.
A lack of significant farmer selling and the need to keep some weather premiums in the futures ahead of spring seeding helped underpin canola as well, said traders.
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Statistics Canada releases its first acreage estimates of the year on April 23, and positioning ahead of the report is expected to provide direction over the next few days. However, most industry participants are only anticipating small acreage adjustments compared to the previous year.
About 26,570 canola contracts were traded on Monday, which compares with Friday when 28,545 contracts changed hands. The May/July spread was a feature of the activity, as traders were busy rolling their positions out of the front month.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were up by five to nine cents per bushel on Monday, with speculators covering short positions behind some of the strength.
Fund traders have put on a record large net short position in soybeans over the past week, and were looking to secure some profits, according to participants.
Expectations for increased demand from China contributed to the firmer tone in beans, as the country announced adjustments to its lending rates over the weekend that should make it easier for importers to secure financing.
However, the big South American crop did remain a bearish influence, limiting the upside potential in soybeans.
SOYOIL futures settled higher on Monday, but lagged soymeal to the upside as the product spreads saw some adjustment.
SOYMEAL futures were higher on Monday.
CORN futures in Chicago were down by one to two cents per bushel on Monday, with improving US planting conditions behind some of the selling pressure.
The latest weather forecasts should allow US farmers to make some good seeding progress over the next week, with only sporadic showers predicted heading into the end of the month.
Declining end user demand, with some livestock feeders reported to be turning to cheaper alternatives, also put some pressure on corn.
On the other side, spillover from the advances in soybeans and wheat did help temper the declines in corn.
WHEAT futures in Chicago were up by four to nine cents per bushel on Monday. Kansas City and Minneapolis wheat futures were up by four to seven cents.
End user bargain hunting at the recent lows helped give the wheat market a bit of a boost to start the week. Speculative short covering, amid some oversold price sentiment was also supportive.
However, the US missed out on yet another Egyptian tender, as US prices do remain expensive internationally. Ideas that US condition ratings likely improved over the past week were also a bit bearish for wheat.
Settlement prices are in Canadian dollars per metric ton.
