By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
October 14, 2014
Winnipeg – ICE Futures Canada canola contracts were up on Tuesday, taking some direction from the continued strength in CBOT soybeans.
Soybeans rallied on Monday, when Canadian markets were closed for Thanksgiving, and with soybeans up again on Tuesday, the Canadian oilseed followed its US counterpart.
In addition, the November canola contract moved back above the psychological C$400 per tonne level, which was bullish from a chart standpoint, according to participants. Fund traders are still holding very large short positions in canola, and some of the buying interest was tied to short-covering. A weaker tone in the Canadian dollar was also supportive for canola.
Read Also
Canadian Financial Close: C$ firm Monday
Glacier FarmMedia — The Canadian dollar held firm relative to its United States counterpart on Monday, with positioning ahead of…
However, CBOT soyoil was down on the day, which limited the upside potential in canola. Favourable harvest weather across Western Canada and increased farmer selling also put some pressure on values.
About 37,417 canola contracts were traded on Tuesday, which compares with Friday when 27,807 contracts changed hands. Spreading was a feature, accounting for 26,952 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
Soybean futures in Chicago surged 19 to 20 cents per bushel on volatile trade Tuesday, as harvest delays over wet weather and sluggish farmer selling allowed values to trend higher for a second consecutive session.
Dry weather concerns in Brazil also lifted values, according to a report.
Expectations of a massive harvest in the US limited the gains.
SOYOIL futures were lower on Tuesday with possible spreading against soymeal a feature.
SOYMEAL futures recorded large gains, following soybeans and also on reports that reduced use of feed grains in China has sparked demand for fresh supplies.
WHEAT futures in Chicago lifted four to six cents per bushel on volatile trade Tuesday, as tight ending stocks from Friday’s USDA report and a lower US dollar lent support to the market.
There is speculation Egypt may temporarily lower imports due to large reserves which limited the gains.
CORN futures in Chicago jumped nine to 11 cents per bushel Tuesday, buoyed by concerns rain in the US Midwest will slow the harvest and on expectations the next USDA report will show the corn harvest as 25 percent complete.
Over the past week rain in many states has slowed fieldwork and kept large equipment off the field.
There are some ideas that farmers will sell off more supplies of their grain, once the harvest picks up again, which was bearish.
– The wheat harvest in the United Kingdom was the third highest on record, pushed upwards by yields which may prove to be an all-time high, according to a report.
– France exported 1.8 million tonnes of wheat during the first three months of the season, said an analyst. That compares to 2.4 million tonnes over the same time last year.
– Ukraine is expected to lose about 45,000 hectares (111,200 acres) of its grains harvest due to fighting in the eastern region of the country.
Settlement prices are in Canadian dollars per metric ton.
