By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 14 – THE ICE Futures Canada canola market finished slightly stronger in tight-range trading Tuesday – taking direction from the US soy complex.
Market activity was confined to light, two-sided trade for much of the day, with some spreading occurring in the May/July contract in the early-going, according to a trader.
“Exporters continue to pick away at the market, they’re interested, but only at certain prices,” the trader added.
Malaysian palm oil was slightly higher which helped to
Read Also
Canadian Financial Close: Loonie, crude oil advance
The Canadian dollar reached its highest close in nine days on Wednesday, aided by higher crude oil prices. The loonie…
However, the Canadian dollar was stronger relative to its US counterpart which was bearish for canola as it made it tougher to sell on the international market while also pressuring crush margins.
The ongoing soybean harvest in South America and expectations for a massive US crop, limited the gains.
Around 15,448 canola contracts were traded on Tuesday, which
compares with Monday when around 16,978 contracts changed hands.
SOYBEAN futures at the Chicago Board of Trade were up by six to 11 cents per bushel on Tuesday, as the market managed to see a corrective bounce off of the lows hit recently.
End-user bargain hunting and speculative short-covering were both behind some of the strength, with soymeal leading to the upside in the soy complex.
However, the large US supply situation and big South American crops did limit the upside potential in soybeans. Concerns that an avian flu outbreak in the US would cut into demand from the poultry sector were also overhanging the market.
SOYOIL futures settled higher on Tuesday.
SOYMEAL futures were higher on Tuesday, as oversold price sentiment provided some support and values recovered off of nearby lows.
CORN futures in Chicago were up by two to three cents per bushel on Tuesday, taking some direction from the gains in soybeans.
A slow start to planting this year’s US corn crop was also supportive, according to participants. The USDA reported that only 2% of the corn crop was seeded as of this past Sunday, which was behind trade guesses and the five-year average of 5%.
However, analysts pointed out that producers can still make short-work of seeding the crop when the conditions allow.
WHEAT futures in Chicago were down three to five cents per bushel on Tuesday, despite declining crop ratings as forecasts continue to call for rain across the dry US Plains. Minneapolis and Kansas City wheat futures were down by three to eight cents.
The weekly USDA crop report place the US winter wheat crop at 42% good-to-excellent, which was down from 44% the previous week. However, rainfall this week is expected to lead to improvements in subsequent reports, and the generally improving prospects kept the bias pointed lower in wheat.
Ideas that US wheat remains overpriced in the international market also weighed on values.
– Japan announced a tender to purchase 109,000 tonnes of milling wheat from the US, Canada, and Australia, for delivery in May and June. The tender closes on April 16.
– Australian forecasters are predicting a 70% chance of an El Nino by June. If an El Nino does develop, it would link to higher temperatures and lower precipitation in the country.
– Spring wheat seeding in Russia is running slightly behind last year’s pace, according to reports.
