By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
March 19, 2014
Winnipeg – ICE Futures Canada canola contracts were higher Wednesday, as speculators finished short covering and started adding to their long positions, according to brokers.
Spillover support from the advances seen in outside oilseeds, including the Chicago soy complex, Malaysian palm oil and European rapeseed added to the bullish tone.
Steady commercial demand and weakness in the value of the Canadian dollar also encouraged some of the buying that took canola higher.
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However, prices were starting to look attractive for farmers, which sparked some hedging that helped to limit the advances.
The large Canadian canola supply situation also continued to overhang the market.
About 27,841 canola contracts were traded on Wednesday, which compares with Tuesday when 20,835 contracts changed hands. Spreading accounted for 24,096 of the trades.
Milling wheat, durum and barley futures were untraded following price revisions after the close on Tuesday.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade settled nine to 15 cents per bushel higher on Wednesday, with declining South American crop prospects behind some of the buying interest.
The Brazilian Association of Vegetable Oil Industries (known as Abiove) released a report today pegging the country’s soybean crop at 86.1 million tonnes, which would be down 2.8% from the association’s previous estimate. Drought earlier in the growing season, followed by heavy rains at harvest time, were to blame for the declining production estimate.
Technical signals contributed to the gains, following yesterday’s move above US$14.00 per bushel in the May contract.
SOYOIL futures were slightly weaker on Wednesday, backing away from earlier advances as profit-taking came forward to weigh on prices.
SOYMEAL futures were higher on Wednesday, following soybeans. Spreading against soyoil was also supportive.
CORN futures in Chicago were up one to two cents per bushel, finding some spillover support from the rally in wheat.
Ongoing uncertainty over the situation in Ukraine, and the potential for disruptions to grain movement there, were also supportive.
However, corn was running into resistance to the upside with farmer selling reported to be picking up as values near US$5.00 per bushel.
WHEAT futures in Chicago settled 19 to 23 cents per bushel higher on Wednesday, boosted by persistent weather concerns in the southern Plains and speculative buying.
Dry weather across a large portion of the southern winter wheat belt has led to concerns over the state of the crops there and the Kansas City hard red winter wheat predominately grown in the region led to the upside. Kansas City futures were up by as much as 25 cents, while Minneapolis spring wheat gained by 19 to 21 cents.
Chart-based buying contributed to the gains, as some stops were hit on the way up, according to participants.
– Japan received no bids for feed wheat or feed barley in their weekly tender. The country had tendered to purchase 120,000 tonnes of feed wheat and 200,000 tonnes of barley.
– Ukraine’s agriculture ministry is not expecting any negative impact on exports, with mainland port facilities expected to make up for the 7% capacity lost in Crimea. The ministry also reported that farmers have planted 24% of their spring grains to date.
