By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Jan. 2 (CNS Canada) – ICE Futures Canada canola contracts were stronger in thin trade on Tuesday, as chart-based buying and spillover from advances in Chicago Board of Trade soyoil provided support.
After posting large losses last week, canola was looking oversold and due for a correction, according to participants. Cold Prairie temperatures and the resulting lack of farmer selling was also said to be supportive.
However, recent strength in the Canadian dollar tempered the upside. A general technical downtrend also remains in place, with any strength seen as a selling opportunity for fund traders with growing short positions.
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About 11,553 canola contracts traded on Tuesday, which compares with Friday when 13,485 contracts changed hands. Spreading accounted for 5,034 of the contracts traded.
Soybean futures at the Chicago Board of Trade managed to hold onto small gains by Tuesday’s close, after bouncing around both sides of unchanged in choppy activity.
Weather concerns in Argentina provided some underlying support, with forecasts calling for hot temperatures in the country likely to cause some stress to the developing crops despite recent rainfall.
Solid weekly export inspections of about 1.1 million tonnes were also supportive.
However, speculators remain on the sell side adding to short positions, which put some pressure on values.
Wheat futures were stronger, as freezing temperatures across the United States Plains provided the catalyst for the jump. The cold weather raised concerns over winterkill in the region, with up to a quarter of the winter wheat crop likely damaged in some way.
Weekly U.S. wheat export inspections of about 275,000 tonnes came in below trade guesses, tempering the upside, as U.S. wheat continues to struggle in the global export market.
The gains in wheat spilled over to provide some support for corn, while weekly export inspections were also supportive.
The USDA reported weekly U.S. corn export inspections of about 680,000 tonnes were in line with trade expectations.
