By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, June 19 – Canola contracts on the ICE Futures Canada trading platform ended sharply higher on Friday, with the two nearby months all breaking above the psychological C$500 per tonne level.
Speculative-based buying amid ongoing worries about tight Canadian canola supplies was behind the advances, analysts said.
Unfavourable drought and frost in Western Canada this growing season will likely reduce 2015/16 canola production. While rain is in the forecast for some of the drought-stricken areas, some damage can’t be erased. Certain western Canadian canola crops are also developing slowly due to cool temperatures.
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A softer Canadian dollar and strength in Chicago soyoil futures were also underpinning the market.
Buy stops were hit on the way up, helping to amplify the gains.
Though, canola is looking expensive relative to other commodities, which limited the upside, as it has brought crush margins down to lows that haven’t been seen in 10 years.
About 28,336 contracts traded on Friday, which compares with Thursday when 20,011 contracts changed hands. Spreading accounted for 15,560 of the trades.
Milling wheat and durum futures were untraded and unchanged. The October barley contract moved lower, and saw 50 contracts traded.
SOYBEANS posted losses of three to six cents per bushel on Friday, as traders took profits before the weekend amid improved weather forecasts for much of the US Midwest.
A break from recent rains should also help farmers finish planting efforts in several regions that are badly behind schedule.
Values were also correcting themselves somewhat after hitting their highest mark since May 11 during the previous session.
SOYOIL futures in Chicago ended 30 points higher on the day.
SOYMEAL futures finished lower following soybeans.
CORN futures on the Chicago Board of Trade ended four cents per bushel lower Friday, as forecasters predicted drier days ahead for water-logged sections of the US Midwest.
Despite the flooding, analysts say a lot of the US corn crop could still pollinate in July which is traditionally the hottest month in the Midwest.
However, reports of corn in the Midwest that is yellowing and in danger of contracting diseases helped to limit the losses.
Wheat futures on the Chicago Board of Trade ended mixed Friday, with the near-term July contract ending marginally higher due to recent heavy rains which have delayed harvest efforts and hurt crop quality. Meanwhile, the more deferred values were pushed a cent lower by some profit-taking and pressure from corn and soybeans.
Fierce competition in the international market-place has made it tough for US exporters to win contracts, according to a report.
Some farmers in the US Great Plains are reportedly increasing sales of their wheat supplies, which was bearish for values.
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ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
