October 1, 2014
Winnipeg – ICE Futures Canada canola contracts settled narrowly mixed on Wednesday, retreating from earlier advances by the close as farmer hedges and a lack of buying interest weighed on values.
Gains in CBOT soybeans and soyoil provided some spillover support for canola throughout the session. The November canola contract briefly moved above the psychological C$400 per tonne level, but it was unable to sustain a move above that key chart point. The general technical downtrend remains in place, which made the early gains a good selling opportunity, according to participants.
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Hedges also came forward late in the day, and were not met with any significant buying interest, according to traders.
The uncertainty over the size of the Canadian canola crop did keep some caution in the market.
Statistics Canada releases updated production estimates on
Friday, October 3. While most industry participants anticipate a slight upward revision to the size of the canola crop, actual yield reports have been highly variable as the harvest moves forward.
About 16,095 canola contracts were traded on Wednesday, which compares with Tuesday when 18,927 contracts changed hands. Spreading was a feature, accounting for 14,556 of the contracts traded.
Milling wheat, durum, and barley were all untraded, although prices were revised after the close.
CORN futures in Chicago bounced around on volatile trading Wednesday, before rallying to end half a cent per bushel higher.
Values hit five-year lows in early trade after an estimate from the USDA showed larger than expected stockpiles of the grain. However, investors who had bet on lower prices eventually closed their positions.
There are reports of rainfall across the US Corn Belt this week which is expected to hamper fieldwork.
US ethanol makers are cutting production after US stockpiles reached an 18-month high last month, according to a report.
SOYBEAN futures in Chicago ended three to four cents per bushel higher on short covering Wednesday, as traders positioned themselves in anticipation of Thursday’s USDA report on international demand.
Cooler temperatures are expected to hit the US northern Plains and western Corn Belt by the end of the week, which was bearish, according to traders.
The large US carryout is a “negative force” in the market right now, according to a report.
SOYOIL futures ended higher on Wednesday, in sympathy with palm oil, said an analyst.
SOYMEAL futures recorded slight gains, following soybeans.
WHEAT futures in Chicago settled one to four cents per bushel higher on Wednesday, as traders positioned themselves ahead of tomorrow’s USDA report on Export Sales.
Large global supplies, softer cash wheat markets in Europe and the Black Sea region limited the upside, according to a report.
The Russian currency hit new lows on Tuesday. Analysts say this could prompt farmers to hoard supplies.
– The Western Australia government’s decision to close its trade office in Jakarta is being criticized by several analysts who feel it will hurt business efforts between the two sides. One trader said the move would have a “major impact” on agricultural groups including wheat.
– Turkey has issued a tender for 200,000 tonnes of milling wheat.
– Wheat production in the bloc of Brazil, Argentina, Paraguay, and Uruguay is forecast to increase by 8.8%, to 22.2 million tonnes in 2014/15, according to a report.
Settlement prices are in Canadian dollars per metric ton.
