By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Jan. 30 (CNS Canada) – ICE Futures canola contracts were weaker on Wednesday, although activity was choppy as traders await fresh trade news.
“Everyone is marking time,” said a trader, noting that participants were keeping a close eye on trade negotiations between the United States and China this week.
Strength in the Canadian dollar accounted for some of the selling pressure in canola, according to participants.
A lack of significant end user demand, as visible supplies remain large, added to the softer tone.
However, gains in Chicago soyoil and soybeans provided some spillover support.
Cold temperatures across much of the Prairies are slowing farmer deliveries, which also helped limit the losses.
About 25,124 canola contracts traded on Wednesday, which compares with Tuesday when 14,517 contracts changed hands. Spreading accounted for 18,638 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade posted small gains on Wednesday, amid increasing optimism that trade talks between China and the United States will lead to improved relations between the two countries.
Weather concerns and declining production prospects in parts of Brazil were also supportive. However, mounting harvest pressure out of the South American country did temper the advances.
The U.S. Department of Agriculture is expected to release its first weekly export sales report in over a month on Thursday, following the partial government shutdown. Monthly supply/demand and production numbers will be out Feb. 8.
CORN was higher, with chart-based buying contributing to the gains as the March contract rose above its 50-day moving average.
Dryness concerns in Brazil were also supportive, as early yield reports are coming in below expectations and the second crop being planted in some areas will also face low moisture reserves.
WHEAT futures were higher at the close, after trading to both sides of unchanged throughout the session.
Bitterly cold temperatures in parts of the Midwest provided some support, amid concerns over winterkill in areas with not enough snow cover.
While U.S. wheat is said to be looking more attractively priced compared to Russian wheat on the global market that has yet to translate into increased business.
Next week’s USDA reports will include winter wheat acreage estimates, with average trade guesses predicting a slight downward revision in planted area on the year.