By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Feb. 16 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, seeing a modest recovery after declining earlier in the week.
Gains in outside markets, including crude oil and Chicago Board of Trade soyoil contributed to the firmer tone in canola, according to participants.
However, resistance held to the upside, with both the March and May contracts settling just below their 20-day moving averages. Ideas that end user demand is being rationed at current price levels also tempered the upside, as basis levels have softened in the countryside.
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About 21,029 canola contracts traded on Wednesday, which compares with Tuesday when 17,154 contracts changed hands. Spreading accounted for 15,122 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were higher on Wednesday, with South American crop concerns behind some of the strength.
While recent rains in Argentina have eased some of the dryness issues there, much of the country and southern Brazil are still dealing with major drought issues with the latest moisture likely not enough to boost yields significantly.
A number of analysts have lowered their projections for South American soybean crops over the past week.
Gains in crude oil, amid renewed tensions along the Russia/Ukraine border, added to the firmer tone in the soy market.
The United States Department of Agriculture announced private export sales of 132,000 tonnes of soybeans to China this morning for delivery in 2022/23.
CORN was also up on the back of South American weather concerns on Wednesday.
In addition, crude oil was up by two per cent on the day, trading near US$94 per tonne, which was supportive for corn given its relation to ethanol production.
WHEAT was mixed, with a slightly softer tone in Minneapolis spring wheat and gains in the winter wheats.
The tensions between Russia and Ukraine remained at the forefront of the wheat market, as the two countries are major wheat exporters.
Continued dryness for the U.S. winter wheat crop was supportive, although there is some precipitation in the longer-range outlooks.
