By Phil Franz-Warkentin, Commodity News Service Canada
Feb. 28, 2014
Winnipeg – ICE Futures Canada canola contracts were narrowly mixed on Friday, although the most active contracts all managed to hold onto small gains at the close.
A firmer tone in the CBOT soy complex did provide some underlying support for canola, according to participants. Ideas that canola remains underpriced compared to most other oilseeds were also supportive.
However, canola lagged beans to the upside, with strength in the Canadian dollar putting some pressure on the market. Canada’s record large crop, the ongoing logistics issues across the Prairies, and long range technical signals that are still bearish also served to limit the advances, said traders.
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About 12,837 canola contracts were traded on Friday, which compares with Thursday when 30,776 contracts changed hands. Spreading accounted for 9,260 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following Thursday’s close.
SOYBEAN futures at the Chicago Board of Trade settled 13 to 24 cents per bushel higher on Friday, after trading to both sides of unchanged in early activity.
The most active May contract managed to move back above US$14 per bushel, which was supportive from a chart standpoint, according to traders.
Harvest delays in Brazil underpinned the soy market as well, as did news that Egypt had bought 120,000 tonnes of optional origin beans in an overnight tender.
However, soybeans did run into some resistance to the upside, with the higher prices likely causing some end users to back away.
SOYOIL futures were stronger on Friday, as gains in the outside vegetable oil markets provided support.
SOYMEAL futures were higher on Friday, following soybeans.
CORN futures in Chicago settled with gains of nine to 10 cents, taking some direction from the rally in wheat.
The possibility of shipping disruptions out of Ukraine provided some support for the US futures.
Ideas that US growers are looking to shift some area out of corn and into soybeans this spring were also supportive. However, US corn supplies are still expected to be burdensome, which tempered the advances.
WHEAT futures in Chicago settled 12 to 17 cents per bushel higher on Friday. Cold temperatures across parts of the Midwest were behind some of the strength in wheat, as concerns over winterkill remain at the forefront.
The political unrest in Ukraine was also supporting US wheat prices, as that country is a major wheat exporter and any disruptions there will conceivably shift some demand back to the US.
– The Australian government releases updated production estimates next week Tuesday, and average trade guesses ahead of the report are calling on a 2014/15 wheat crop of 25 million tonnes in the country, which would be the fifth largest on record. However, weather concerns in some parts of the country could cut into that production number.
– Egypt bought 295,000 tonnes of wheat from Russia and Romania for shipment in late March.
– Japan will raise imported wheat prices for domestic millers by an average of 2.3%, according to reports. The increase was due an increased sales tax and the higher costs of bringing in Canadian wheat.
Settlement prices are in Canadian dollars per metric ton.
