By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
March 26, 2014
ICE Futures Canada canola contracts were up for the third straight session on Wednesday, with speculative buying behind much of the strength as prices continued to rebound from the sharp declines posted last week.
Commercial demand was also supportive, with the persistent logistics issues across the Prairies starting to show some signs of improvement, said traders. However, end users were not aggressive given the large supplies that they know are still overhanging the market.
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Farmer selling did temper the gains, with many producers now said to be looking to make some sales ahead of spring planting.
The softer tone in CBOT soyoil also weighed on canola, said traders. Strength in the Canadian dollar was another bearish influence, with the currency up nearly half a cent relative to its US counterpart.
About 17,740 canola contracts were traded on Wednesday, which compares with Tuesday when 20,243 contracts changed hands. Spreading accounted for 15,232 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade rose four to 12 cents on Wednesday, as investors consolidated their positions ahead of the quarterly grains report by the USDA, which is expected to show razor-thin US supplies of the oilseed.
The spring USDA forecast traditionally causes heavy market volatility which is why markets are seeing the positioning, said an analyst.
Industry participants are expecting the USDA to raise its estimates for soybean planted areas from last year, but the extent of that increase remains to be seen.
SOYOIL futures were mostly unchanged Wednesday.
SOYMEAL futures were two to five cents higher on Wednesday. Spreading against soyoil contributed to the gains.
CORN futures in Chicago fell by two cents on Wednesday amid expectations that quarterly stockpiles on March 1 were at a historically high level.
If stockpiles top 7 billion bushels, as expected, it would be the second-highest amount in 27 years.
WHEAT futures in Chicago declined six to 11 ½ cents while Kansas City HRW was down as much as 20 cents on Wednesday, as forecasts for rain in parched growing conditions of the US southern plains sparked selloffs.
Oklahoma and parts of Kansas and Texas are expected to get 0.6 inches (1.5 centimetres) of rain today with more coming in the next two weeks, according to Commodity Weather Group.
Canada is expected to introduce legislation aimed at unclogging railway-transportation bottlenecks that have plagued shipments of grain and fertilizer.
– Egypt has begun talking about creating a free trade zone with Russia. It is the largest importer of Russian wheat, buying one fifth of Russian wheat exports in 2013-2014.
– Argentina’s grain shipments are currently backed up due to shipping jams near the country’s biggest grain hub of Rosario.
– Britain raised its forecast on Wednesday for wheat. Officials say they’re now expected to reach 1.80 million tonnes, that’s up from a previous forecast of 1.63 million.
Settlement prices are in Canadian dollars per metric ton.
