By Phil Franz-Warkentin, Commodity News Service Canada
April 25, 2014
Winnipeg – ICE Futures Canada canola contracts were sharply higher at Friday’s close, as supportive technical signals and solid end user demand provided support.
Canola continued to find some support from Thursday’s smaller-than-expected acreage estimate from Statistics Canada, according to participants.
Reports of fresh export sales to Pakistan, spillover from the rising CBOT soybean market, a weaker Canadian dollar, and speculative buy stops contributed to the gains as well, said traders.
Scale up farmer hedges tempered the advances, as producers look to generate some cash flow ahead of spring seeding. The large old crop supplies remained a bearish influence overhanging the market as well.
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About 33,731 canola contracts were traded on Friday, which compares with Thursday when 34,509 contracts changed hands. Spreading was a feature, accounting for 27,562 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Thursday’s close.
SOYBEAN futures at the Chicago Board of Trade closed higher on Friday, finishing with gains of four to 26 cents US per bushel.
The market was lifted by bargain hunting after seeing sharp declines earlier in the week, analysts said.
Expectations that Chinese demand for US soybeans will be strong for new crop added to the bullish tone, as did worries about tight old crop supplies in the US.
However, concerns about further Chinese cancellations of old crop soybeans and pressure from the advancing harvest in Argentina limited the gains.
Talk that delayed corn planting in the US could lead to more soybean acres was also bearish.
SOYOIL futures were stronger, following the gains seen in soybeans, market watchers said.
SOYMEAL futures closed higher as strong demand was bullish for the commodity, brokers said.
CORN futures in Chicago settled three to six cents US a bushel higher on Friday, following the advance seen in wheat and soybean futures, according to participants.
Concerns about rainfall seen in the US Midwest overnight causing further delays to corn planting in the US also lifted the market.
However, talk that farmers still have plenty of time to get their crops planted helped to limit the upside.
WHEAT futures in the US ended stronger, with Minneapolis, Kansas and Chicago futures settling seven to 16 cents US a bushel higher.
Support for the markets came from forecasts calling for only minimal precipitation in the US Plains over the next week, brokers said. Winter wheat crops in the region are in desperate need of some rainfall to help improve their condition.
Continued worries about political problems in Ukraine disrupting wheat exports and possibly affecting production in the country added to the bullish tone.
However, the large global supply situation helped to temper the upside, as did reports that global growing conditions for wheat are generally favourable.
• Reports show that Morocco bought 30,000 tonnes of wheat from Poland recently, while Jordan issued a tender for 150,000 tonnes of milling wheat with optional origin.
• Exports of grain out of Russia will likely total about 2 million tonnes in April, and 1.5 to 1.6 million tonnes in May, Rusagrotrans, a Russian rail infrastructure operator said.
• The Egyptian government plans to purchase a record large 4.25 million tonnes of wheat from the country’s farmers this year, which accounts for almost half of the production. Last year, the country’s government bought 3.4 million tonnes of wheat from its farmers.
Settlement prices are in Canadian dollars per metric ton.
