By Phil Franz-Warkentin, Commodity News Service Canada
Feb. 26, 2014
Winnipeg – ICE Futures Canada canola contracts ended with small gains on Wednesday, settling well off their session highs as profit-taking came forward to weigh on values.
The most active May contract had posted gains of over C$5.00 per tonne at one point, but settled up only fifty cents.
CBOT soyoil and soybeans were both higher, which underpinned the Canadian futures for most of the session, according to participants. A lack of farmer selling and weakness in the Canadian dollar, which was down by a half cent relative to its US counterpart, provided some support for canola as well.
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Glacier FarmMedia — The ICE Futures canola market was weaker at midday Wednesday, falling to its lowest levels of the…
However, the longer term outlook remains pointed lower, and any advances remain a good selling opportunity from a chart standpoint.
The ongoing logistics issues across Western Canada remain a bearish influence overhanging the futures as well, although those concerns are mostly priced into the market for the time being.
About 33,544 canola contracts were traded on Wednesday, which compares with Tuesday when 30,183 contracts changed hands. Spreading accounted for 25,862 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following Tuesday’s close.
SOYBEAN futures at the Chicago Board of Trade settled one to 10 cents per bushel higher on Wednesday, boosted by declining crop prospects in South America.
Mounting concerns over Brazilian production provided some underlying support, as hot dry conditions likely cut into yield prospects earlier in the season and now rain delays are slowing the harvest. One private forecast out today pegged Brazil’s soybean crop at 85 million tonnes, which would be 5 million tonnes below the USDA’s last estimate earlier this month.
Tightening US soybean supplies and solid end user demand remained supportive as well, although the more deferred months lagged to the upside amid expectations for a large US crop this year.
SOYOIL futures were higher on Wednesday, boosted by gains in the outside vegetable oil markets and spreading against soymeal.
SOYMEAL futures were narrowly mixed on Wednesday, seeing some consolidation after posting gains recently. Uncertainty over Chinese demand put some pressure on prices.
CORN futures in Chicago settled with small losses of up to two cents on Wednesday, after posting gains for most of the session. Spillover from the declines in wheat accounted for some of the weakness.
Good demand from both ethanol producers and the domestic livestock sector, as cattle prices remain strong, helped underpin the corn market.
However, corn traded at its strongest levels since October, and overbought price sentiment at the highs put some pressure on values.
WHEAT futures in Chicago settled 13 to 15 cents per bushel lower on Wednesday, with chart-based selling a feature. Minneapolis futures were down three to eight cents, while Kansas City was down as much as 11 cents.
A cancellation by Egypt yesterday remained a bearish influence on the US wheat markets, while ideas that other export interest was also backing away also weighed on prices.
On the other side, concerns over winterkill in some parts of the Midwest did provide underlying support.
Settlement prices are in Canadian dollars per metric ton.
