By Phil Franz-Warkentin and Brandon Logan, Commodity News Service Canada
Jan. 27, 2014
Winnipeg – ICE Futures Canada canola contracts were stronger on Monday, as oversold price sentiment and continued weakness in the Canadian dollar provided support.
Canola remains fairly cheap compared to other oilseed markets, and speculative short covering together with routine commercial pricing helped give the futures a bit of a boost to start the week, said participants.
A lack of significant hedge selling pressure, as cold conditions across Western Canada limited country movement, was also said to be supportive.
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However, losses in CBOT soyoil put some pressure on canola, tempering the gains. Canada’s record large crop and the ongoing logistical issues across Western Canada also weighed on values, said traders.
About 17,708 canola contracts were traded on Monday, which compares with Friday when 18,928 contracts changed hands. Spreading accounted for 15,024 of the contracts traded.
Milling wheat, durum and barley futures were untraded, although a few bids and offers were reported in barley.
US Grain and Oilseeds
SOYBEAN futures finished one to three US cents per bushel higher on Monday, underpinned by strong export demand for the US product, industry watchers said.
According to the USDA, the US sold 703,400 metric tonnes of soybeans last week, which beat trade expectations.
Spillover from the gains seen in the soymeal market added to the bullish tone.
However, concerns that China could cancel US soybean shipments and shift demand to Brazilian soybeans limited any further gains.
SOYOIL futures closed 48 to 49 points weaker on Monday, undermined by spillover from the losses seen in the Malaysian palm oil market, brokers said.
SOYMEAL futures were US$3.60 to US$5.20 stronger on Monday, underpinned by strong demand for the US product, analysts said.
CORN futures closed two US cents per bushel stronger on Monday, underpinned by short covering following recent losses, analysts said.
Strong export demand also gave the market a boost, as the USDA reported that private exporters sold 119,888 metric tonnes of corn to unknown destinations on Monday.
Ideas that farmers do not want to sell corn at current price levels were supportive, as were poor weather conditions that have made transporting grain off farms very difficult, participants said.
However, favourable weather for the development of Argentina’s corn crop and spillover from the weakness see in wheat futures limited any further gains.
CBOT WHEAT, MGEX SPRING WHEAT and KCBT RED WHEAT futures closed one to six US cents per bushel weaker on Monday, as continued reports of large global carryover stocks weighed on values, investors said.
Ideas that most of the US winter wheat crop is sufficiently protected were bearish, as the US is expected to see extremely cold temperatures over the next week.
However, ideas that the wheat market is oversold limited any further losses.
Daily World Wheat News
• Reuters reported on Monday that Saudi Arabia booked 715,000 tonnes of wheat, which was more than the 660,000 tonnes it was asking for last week in its latest import tender.
• According to Ag Canada, Canadian all wheat production in 2014/15 is estimated at 29.700 million tonnes, which would be down from 37.530 million tonnes in 2013/14.
• Egypt’s supplies minister said the country has enough wheat to last until the first week of May.
Settlement prices are in Canadian dollars per metric ton.
