By Dave Sims, Commodity News Service Canada
The ICE Futures Canada canola market finished higher on technical buying Tuesday, as investors attempted to square their positions ahead of the New Year.
Speculative buying pushed values above the psychologically important C$440.00 per tonne mark which enticed some traders to come in and try to establish long positions, according to an analyst.
Commercial demand was steady which helped underpin the
market. Some traders were also looking to get out of their
January contract, said the analyst, which was a feature of the session.
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Strength in Malaysian palm oil and soyoil lent support to values.
However, improved prospects for development of the soybean
crop in South America, along with the large US soybean crop,
were bearish for values.
US soybeans recorded losses which put some pressure on canola.
The Canadian dollar was slightly higher which limited the gains, as it made canola less attractive to buyers on the international market.
Around 12,671 canola contracts were traded on Tuesday, which
compares with Monday when around 22,542 contracts changed hands.
Spreading accounted for 8,162 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
Corn futures in Chicago ended six cents per bushel lower as traders took profits just one day after values reached their highest point in almost six months.
Spillover selling from wheat also weighed down corn values, participants said.
According to the USDA, private exporters have booked 157,500 metric tonnes of corn to Mexico for the 2014/15 crop year.
Soybean futures in Chicago dropped four to five cents per bushel Tuesday on concerns over the size of the soybean crop in South America.
Recent rains have bolstered the outlook for the crop in South America, which was drought-stressed entering December.
Figures from the USDA put US weekly export sales at 636,000 metric tonnes. Of that figure, 206,000 tonnes were meal while the rest was soy oil. Both figures are within initial trade projections.
SOYOIL futures were 14 points higher Tuesday as concerns over flooding in Malaysia threatened to disrupt palm oil production in that country. Analysts feel the situation could drive up demand for vegetable-oil alternatives like soyoil and canola oil.
SOYMEAL futures ended lower with spreading against soymeal a feature.
WHEAT futures in Chicago ended 12 to 13 cents per bushel lower Tuesday and 10 to 11 cents per bushel lower on the Kansas City Board of Trade as concerns over the strength of the US dollar and how it might impact international exports pressured values.
The Euro has sunk to a two-year low against the US dollar which is making US wheat even less competitive on the world stage than it has been, said a trader.
Prices were also pressured by reduced concerns over Russian export restrictions. It is looking more and more as though other countries will be able to fill the holes left by Russia’s withdrawal from the market, said an industry-watcher.
Fears that cold temperatures in the US Great Plains could damage the winter wheat crop appear to have subsided. Some risk of winterkill is there due to the lack of snow on the ground but analysts say it’s highly unlikely any supplies will be lost, which was bearish for prices.
– Indonesia and Kazahkstan are still discussing plans to build a large noodle factory. Kazakhstan is one of the world’s largest wheat producers and is trying to expand its exports to Indonesia, which has the world’s fourth largest population.
– Japan imported 3.3 million bushels of hard red wheat from the US in the past marketing year, according to a report.
