By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
May 21, 2014
Winnipeg – ICE Futures Canada canola contracts were stronger on Wednesday, as a rally in the CBOT soy complex spilled over to provide some support.
Concerns over seeding delays in parts of Western Canada, a lack of significant farmer selling, supportive technical signals, improving crush margins, and a weaker tone in the Canadian dollar helped underpin the canola market as well, according to participants.
However, while wet weather was causing seeding delays in Manitoba, the majority of the Canadian canola crop is grown in Alberta and Saskatchewan where seeding conditions have been more favourable, said a broker.
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The large old crop supplies overhanging the market, together with profit-taking at the highs, did limit the advances.
About 14,826 canola contracts were traded on Wednesday, which compares with Tuesday when 13,786 contracts changed hands. Spreading accounted for 10,344 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade closed 15 to 36 cents US per bushel higher on Wednesday, with the July contracting breaking above key resistance of US$15.00 per bushel.
The market was lifted by signs that demand for US soybeans from China remains strong, analysts said.
China’s General Administration of Customs reported that the country bought 2.52 million tonnes of US soybeans in April, an increase of 53 per cent from April 2013.
Firmness in the US cash market for soybeans and chart-based buying added to the bullish tone, traders said.
However, beneficial conditions for planting and good weather for soybeans that have been planted already in the US limited the upside, as it is positive for 2014/15 production.
SOYOIL futures were stronger, following the advances seen in Chicago soybean futures. Short covering following recent losses was also supportive, brokers said.
SOYMEAL futures closed higher, with strength in soybeans and strong demand contributing to the advances, participants said.
CORN futures in Chicago settled little changed, with prices from a quarter cent lower to one cent a bushel higher. The market was caught between spillover support from the gains in soybeans and pressure from the weakness in wheat, brokers said.
Some support came from solid demand for the US commodity and sentiment the market is oversold.
On the other side, good weather, which will allow farmers in the US to get closer to completing corn planting this week, was bearish, as were expectations of a large 2014/15 US crop.
WHEAT futures were mixed, with Chicago and Kansas City futures moving lower amid forecasts calling for beneficial rainfall that will help relieve dryness for US winter wheat crops this week, analysts said.
Minneapolis wheat futures were little changed, with some support coming from ongoing worries about the late spring causing some acreage loss in the northern United States. But, better planting weather expected this week was bearish, brokers added.
• The Buenos Aires Cereal Exchanged increased its estimate of Argentine wheat area by 19 per cent, to 10.6 million acres in its weekly crop report.
• Russia is expected to produce 90 million tonnes of grain in 2014/15, up from 88 million tonnes due to increased production out of Crimea, SovEcon said.
• China imported 373,606 tonnes of wheat in April, China’s General Administration of Customs said. The majority of the wheat came from Australia and Canada, with some also from Kazakhstan.
Settlement prices are in Canadian dollars per metric ton.
