WINNIPEG, (MarketsFarm) – The ICE Futures canola market held onto small gains on Wednesday after trading to both sides of unchanged, seeing some consolidation after hitting contract lows on Tuesday.
Canola was thought to be looking oversold and due for a correction from a chart-standpoint, which accounted for some early speculative buying interest. End user bargain hunting was another minor feature.
Gains in Chicago Board of Trade soybeans and a softer tone in the Canadian dollar also provided some support.
About 34,689 canola contracts traded on Wednesday, which compares with Tuesday when 38,468 contracts changed hands. Spreading accounted for 24,062 of the contracts traded.
SOYBEAN futures at the Chicago Board of trade posted small gains on Wednesday as the market continued to correct after dropping sharply on Monday.
News that Argentina was suspending export registrations on agricultural goods ‘until further notice’ accounted for some of the strength in soybeans. The suspension is thought to be a precursor to the South American country implementing increased tariffs on soybean exports in an effort to deal with an economic crisis.
Increased export tariffs out of Argentina would likely shift some demand back to the United States, with soymeal seeing much of the strength in the futures on Wednesday as Argentina is a major soymeal seller.
However, soyoil remained under pressure, with global coronavirus worries keeping the vegetable oil markets pointed lower.
The advancing Brazilian harvest also weighed on prices.CORN futures were lower on the day. While Argentina may be increasing export tariffs on soybeans, market participants expect corn taxes may be going down. That would boost exports out of the country and cut into some U.S. demand.
WHEAT futures were narrowly mixed, with the broad worldwide concerns over the COVID-19 coronavirus keeping a cautious tone in the wheat market.
Increased export competition out of Ukraine weighed on values, with wheat exports out of the country of 16.5 million tonnes during the crop year to date up by roughly a million tonnes from the same time a year ago.