By Dave Sims and Terryn Shiells, Commodity News Service Canada
The ICE Futures Canada canola market finished weaker on Wednesday, following declines seen in the US soy complex. However, speculative buying helped limit the losses.
“The spreads were pushed around by some traders,” said an analyst, who noted basis levels in Canada had widened out dramatically.
Malaysian palm oil and European rapeseed futures were both
weaker which pressured values.
As well, the large soybean crop in South America was a bearish force overhanging the market.
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However, potential disruptions to palm oil production in Malaysia because of flooding, was supportive.
Commercial buying was steady which also helped underpin the market.
Around 12,202 canola contracts were traded on Wednesday, which
compares with Tuesday when around 12,671 contracts changed hands.
Spreading accounted for 6,358 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
Chicago soybean futures ended 15 to 21 cents US per bushel lower on Wednesday, the final day of 2014. Year-end profit taking and continued good weather for the South American soybean crop contributed to the declines.
Expectations of record large South American soybean production this year further undermined values, according to market watchers.
The losses were also linked to ideas that export demand for US soybeans will start to slow in the New Year, as the big early export program winds down ahead of the South American harvest.
SOYOIL futures were also sharply weaker, undermined by profit taking on recent gains and ahead of the New Year, brokers said.
SOYMEAL futures were softer, taking some direction from the weakness in soybeans.
CORN futures in Chicago finished softer, with losses of four to 10 cents US per bushel. The weakness was linked to profit taking as 2014 comes to a close.
Chart-based selling, after the market broke below the key US$4.00 per bushel in the March contract, exaggerated the losses.
Disappointing data from the ethanol industry also weighed on prices. Weekly ethanol production dropped more than two per cent, reports show.
However, domestic and export demand for US corn remains strong, which was keeping a firm floor under the market.
WHEAT futures at the Chicago Board of Trade ended 10 to 12 cents US per bushel lower on Wednesday. Year-end profit taking was bearish for prices.
Ideas that high prices are making US wheat supplies unattractive on the export market weighed on the market as well.
Some concerns about cold weather damaging US winter wheat crops earlier this week tempered the losses, though reports say the conditions likely did not cause much winterkill.
• India’s Madkya Pradesh state is predicting a larger winter wheat crop than last year, as they hope to produce more than 175 lakh tonnes. Last year, production totalled 174.78 lakh tonnes.
• Egypt is buying 120,000 tonnes of Russian wheat before the 15 per cent export duty imposed by Russia’s government comes into effect on February 1, 2015.
