By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, March 8 (MarketsFarm) – The ICE Futures canola market continued to hit fresh contract highs on Tuesday as world agricultural markets remained focused on the conflict in Ukriane.
Crude oil climbed sharply higher on Tuesday on news that Shell would stop buying Russian oil, while the United States and other countries were considering a ban. Chicago soyoil, Malaysian palm oil and European rapeseed futures were all higher as well, providing spillover support for the Canadian oilseed.
Weakness in the Canadian dollar and ongoing concerns over tight old crop supplies also underpinned the futures.
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However, overbought price sentiment did temper the upside, with the market settling well off its highs for the session.
About 22,357 canola contracts traded on Tuesday, which compares with Monday when 13,641 contracts changed hands. Spreading accounted for 7,486 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Tuesday, as the ongoing conflict in Ukraine and resulting rally in crude oil provided support.
Reports Malaysia will implement a 20 per cent biofuel mandate before the end of the year contributed to gains in palm oil, which underpinned the vegetable oil markets in general.
Solid export demand was also supportive for soybeans, with flash sales of 132,000 tonnes of soybeans to China and an additional 126,000 tonnes to other unknown destinations reported by the United States Department of Agriculture.
The USDA’s monthly supply/demand report will be out on Wednesday, with pre-report positioning also behind some of the activity.
CORN was mixed, trading to both sides of unchanged amid the conflicting influences of outside markets.
The gains in crude oil were supportive for the energy-linked grain, but losses in wheat were bearish.
U.S. corn ending stocks are expected to be revised lower in Wednesday’s report, as the Ukraine conflict should lead to an increase in U.S. exports.
WHEAT was lower across the board, with ‘Turnaround Tuesday’ selling pressure after the sharp gains of the past week behind some of the weakness. Activity was highly volatile, with Chicago prices down their expanded daily limit at one point before rallying sharply higher and then falling back to settle with only small losses. The Kansas City and Minneapolis contracts also saw wide price swings during the day.
Ukraine and Russia account for a large portion of the world wheat export market, with the continued conflict raising questions over how much wheat will be available from the region. However, there were reports out of Ukraine today that the country still intended to issue export certificates despite the fighting.
The USDA announced private export sales this morning of 193,000 tonnes of hard red spring wheat to the Philippines.
