By Terryn Shiells and Brandon Logan, Commodity News Service Canada
Winnipeg, Jan. 23 – ICE Futures Canada canola contracts held onto small gains on Thursday, but settled well off the highs of the day.
Early strength in the Chicago soy complex helped canola values move higher, but soybeans and soyoil both finished well off their highs.
Canola futures found some support from the sharp downswing in the value of the Canadian dollar, which made the commodity more attractive to exporters and crushers. The Canadian currency was well below the 89 cents US mark Thursday afternoon.
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Oversold price sentiment and ideas that canola is undervalued compared to other oilseeds further underpinned values.
However, a pickup in farmer selling, due to warmer weather in Alberta and Saskatchewan, may have put some downward pressure on prices, traders said.
The large Canadian supply situation and difficulty getting products to end users because of logistics problems continued to overhang the market.
Volumes were very heavy due to a large EFP (exchange for physical) going through in the March contract, paired with cash exchanges, brokers said.
About 54,121 canola contracts were traded on Thursday, which compares with Wednesday when 33,920 contracts changed hands. Spreading accounted for 26,208 of the trades.
Milling wheat, durum and barley futures were untraded.
Chicago Board of Trade (CBOT) soybean futures closed two to four US cents per bushel weaker on Thursday, undermined by ideas that China could cancel some US soybean purchases and buy Brazilian soybeans instead, traders said.
The USDA is scheduled to release its weekly export sales numbers on Friday instead of Thursday due to the Martin Luther King Jr. holiday on Monday.
Expectations that South American soybean crops are developing nicely, added to the bearish tone. Brazil is expected to produce a record large crop.
However, weakness in the US dollar index limited any further losses.
Soyoil futures were two to six points higher on Thursday, underpinned by spillover from the gains seen in the Malaysian palm oil market, investors said.
Soymeal futures closed US$0.70 to US$2.90 lower on Thursday, undermined by spillover from the losses seen in the soybean market, brokers said.
CBOT Corn futures were one to two US cents stronger on Thursday, underpinned by ideas that weekly US ethanol production numbers, which are scheduled to be released later in the afternoon, will show increased output from the previous week, industry watchers said.
Concerns that farmers do not want to sell corn at current price levels, and are waiting for further gains in prices, were also bullish.
Extremely poor weather conditions have also given prices a boost, as cold temperatures, fresh snowfall, and strong winds have caused issues moving the grain off farms, analysts said.
CBOT wheat futures closed seven to eight US cents per bushel higher on Thursday, rebounding from a three-year low as traders believe the market is oversold, participants said.
Concerns about the US winter wheat crop also provided an upward push to prices. Temperatures in the US Midwest are expected to be extremely cold over the next week and wheat that is not protected could be damaged by the cold.
Spillover from the gains seen in the corn market added to the bullish tone, as did a recent purchase of 350,000 metric tonnes of wheat from Iraq, including 50,000 tonnes from the US, brokers said.
MGEX spring wheat futures were close to unchanged to two US cents higher on Thursday, following the trends seen in the CBOT wheat KCBT red wheat futures, analysts said.
However, ample 2013/14 spring wheat supplies due to record production in Canada limited any further gains.
KCBT red wheat futures closed seven to eight US cents higher on Thursday, as expected strong demand from Brazil is supporting prices, traders said.
Concerns about the US winter wheat crop added to the bullish tone, as extremely cold weather in the US Midwest could damage crops that are not sufficiently protected from the conditions.
• Saudi Arabia issues a tender for 660,000 tonnes of wheat
for April and/or June delivery.
• According to reports, Taiwan bought 73,400 tonnes of US wheat from Toepfer and Columbia Grain on Thursday.
• India’s Minister of State for Agriculture said wheat production this year is expected to surpass the previous record of 94.88 million tonnes.
Canadian canola settlement prices are in Canadian dollars per metric ton.
Price Change
Canola Mar 428.20 up 0.30
May 437.90 up 0.50
Jul 446.80 up 1.10
Milling Wheat Mar 181.00 unch
May 186.00 unch
Durum Mar 245.00 unch
May 249.00 unch
Barley Mar 127.00 unch
May 129.00 unch
