By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, November 25 – THE ICE Futures Canada canola market ended higher Wednesday tracking gains in the US soy complex ahead of the US Thanksgiving holiday.
Strength in European rapeseed futures and Malaysian palm oil contributed to the upside.
Traders were positioning themselves in case a major world event happened while markets were closed, said an analyst.
“The funds are well-positioned as they have a large short-position on now,” he said.
Despite recent rains, some soybean fields in Brazil could
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However, the outlook for South American soybean production still points toward a massive harvest, which was bearish.
The technical bias lies pointed to the downside while most
investors expect the next StatsCan survey to reveal a larger
canola crop than previously forecast.
Around 20,859 canola contracts were traded on Wednesday, which compares with Tuesday when around 23,839 contracts changed hands. Spreading accounted for 11,394 of the contracts traded.
Milling wheat and durum were untraded while 125 barley contracts changed hands.
Settlement prices are in Canadian dollars per metric ton.
Soybean futures at the Chicago Board of Trade were up nine to twelve cents per bushel on Wednesday, with speculators covering short positions ahead of the US Thanksgiving holiday behind some of the activity.
The US markets will be closed Thursday and only operate at reduced hours on Friday. Many participants were already moving to the sidelines on Wednesday, and the thin volumes helped exaggerate the gains, according to participants.
The USDA reported that private exporters had booked sales of 190,000 tonnes of US soybeans for delivery to ‘unknown destinations’ during the current marketing year.
However, the prospect of increased exports from Argentina remained a bearish factor in the background as well as traders continue to digest the implications of the South American country’s new government.
SOYOIL settled sharply higher on Wednesday, seeing the biggest gains of the soy complex.
SOYMEAL futures were higher on Wednesday.
CORN futures in Chicago were up by one to three cents per bushel on Wednesday, taking some direction from the rally in soybeans.
Short-covering ahead of the Thanksgiving holiday was a feature in corn, according to participants.
Solid demand from the ethanol sector helped underpin the futures as well, with data released by the US Department of Energy showing that US ethanol production topped 1 million barrels per day for the first time ever during the week ended November 20.
WHEAT futures in Chicago were narrowly mixed on Wednesday, although the bias was lower in the most actively traded nearby contracts.
Improving US moisture conditions, large global supplies, and poor export demand all weighed on wheat values, said traders.
However, wheat did see some short-covering ahead of Thanksgiving, which limited the losses in the front months and helped prop up the more deferred positions.
– Jordan has re-tendered to purchase 100,000 tonnes of wheat, after cancelling two previous tenders due to a lack of offers.
– Egypt’s latest tender for 240,000 tonnes of wheat was primarily covered by France, with Romanian and Russia also selling a cargo each to the world’s largest wheat buyer.
