By Dave Sims, Commodity News Service Canada
Winnipeg, Feb. 22 – ICE Futures Canada canola contracts fell for the week that ended Feb. 22, as the ever-strengthening Canadian dollar put pressure on prices amid a sea of volatility.
The Canadian market was closed on Feb. 15 for a civic holiday while American markets were also shuttered due to Presidents Day.
However, when trading did resume canola began to climb out of the lows suffered the previous week.
A potential shortage of Malaysian palm oil put some strength into the vegetable oil market ,which canola tapped into throughout the week. Rain showers in Brazil also caused some slight disruption to the soybean harvest, which helped support canola futures. Commercial buying was also fairly steady, which was a stabilizing factor.
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However, the strength of the Canadian dollar remained the biggest factor influencing canola through the week as the loonie fought to climb above the US73 cent mark.
Traders began rolling out of the soon-to-expire March canola contract into the most-active May one.
Currency issues look to remain the major story in Canadian markets. Also, some strength in the vegetable oil market will lend support.
CBOT corn futures were higher for the week. Weakness in the US dollar mixed with rising crude oil prices to underpin the corn market. Weather issues were lacking while investors covered shorts off of nearby lows. Cheap corn supplies from South America and the Black Sea region continue to make life difficult for US exports.
CBOT soybeans were also higher due to short-covering and rainfall which hampered harvest efforts in Brazil. Speculators covered positions in the early going after ideas emerged that the net short position held by large funds had become extremely large.
CBOT wheat futures posted gains largely on the back of a softer US dollar and other technical issues. Speculation swirled that warm temperatures in the U.S. southern plains could cause some plants to emerge prematurely and lose yield potential.
