By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
October 16, 2014
Winnipeg – ICE Futures Canada canola market saw some choppy two-sided activity on Thursday, but settled higher in the most active nearby months as gains in the CBOT soy complex provided some spillover support.
After rallying at Wednesday’s close, canola was initially due for a bit of a correction on Thursday. However, the nearby technical signals have turned higher and the advances in CBOT soybeans were enough to provide some spillover strength in canola as well, according to participants.
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Continued weakness in the Canadian dollar, which remains at its weakest levels in five years relative to its US counterpart, was also supportive for canola, according to traders.
However, the advancing Canadian harvest did remain a bearish influence overhanging the canola market, with most of the canola crop expected to be in the bin within the next week, according to participants. Improving US harvest weather also weighed on values.
About 27,098 canola contracts were traded on Thursday, which compares with Wednesday when 27,410 contracts changed hands. The November/January spread was a feature as participants were rolling positions out of the front month.
Milling wheat, durum, and barley were all untraded.
CORN futures in Chicago trended four cents per bushel higher Thursday, as speculative buying by large players ruled the day.
Global economic uncertainty prompted many hedge funds to position themselves and place bets that prices will eventually rise.
Forecasts calling for drier weather in the US Midwest limited the gains as analysts say that should help with the harvest.
Downward action in the energy market is also seen as a bearish force for corn values.
SOYBEAN futures in Chicago ended 10 to 14 cents per bushel higher Thursday over ideas of tight domestic supplies, along with speculative buying from hedge funds and other large groups.
The National Oilseed Processors Association reported a drop in the number of bushels crushed in September. The agency said US processors had crushed 111 million bushels in September, significantly higher than the August total of 99.97 million bushels. This suggests that rates are at historically low levels, said an analyst.
Ideas of improving demand from China provided support to the market.
SOYOIL futures ended higher on Thursday, tracking soybeans.
SOYMEAL futures jumped higher on Thursday.
WHEAT futures in Chicago advanced 10 to 11 cents per bushel higher Thursday on technical buying while also receiving support from gains in corn and soybeans.
Wet weather in the Black Sea region is expected to cause delays to the summer crop harvest, which also lent support to values.
Dry weather conditions are forecast for the Ohio Valley which are expected to aid planting of winter wheat, according to a report.
– Brazil will need to import one million tonnes of US wheat to meet its food requirements in 2015, according to a Brazilian consulting firm.
– Britain’s import/export ratio looks set to change. For the past two years it has imported more wheat than it’s sold but that looks like it could change because of the large harvest, said a trader.
– Snowfall in Siberia has delayed the harvest there, according to a report.
Settlement prices are in Canadian dollars per metric ton.
