By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
March 13, 2014
Winnipeg – ICE Futures Canada canola contracts settled with small gains on Thursday, but finished well off their session highs as the speculative buying that supported prices for most of the day subsided and farmer selling came forward to weigh on values.
The shifting technical bias, together with ideas that the logistics issues across the Prairies were showing some improvement, contributed to the fund short-covering and other speculative buying that helped canola hit three month highs during the session, according to traders.
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However, the market ran into some resistance to the upside and backed away late in the session. Many growers are looking to make some sales for cash flow needs ahead of spring planting, and the resulting farmer hedges helped temper the advances, said traders.
A stronger tone in the Canadian dollar, which was up by half a cent relative to its US counterpart, and declines in CBOT soyoil served to slow the upward move in canola as well.
About 20,564 canola contracts were traded on Thursday, which compares with Wednesday when 21,450 contracts changed hands. Spreading accounted for 14,192 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following Wednesday’s close.
SOYBEAN futures closed three to 10 US cents bushel higher Thursday, seeing an upward correction amid ideas that recent declines were overdone, analysts said.
Ongoing worries about tight old crop supplies in the US and steady commercial demand also helped to fuel some of the advances.
Bargain hunting following recent lows added to the bullish tone.
However, concerns about possible upcoming cancellations from China and expectations of a large 2014/15 US soybean crop limited the gains.
SOYOIL futures were 35 to 43 points lower, undermined by follow-through selling after Wednesday’s weaker close, traders said. Spreading against soymeal was also bearish.
SOYMEAL futures closed US$1.30 to US$5.40 higher, supported by steady demand, participants said. Spreading against soyoil favoured soymeal futures.
CORN futures in Chicago settled one to four cents US a bushel lower Thursday, undermined by profit taking following recent advances and spillover pressure from the declines seen in wheat.
A sharp drop in domestic ethanol production during the week added to the bearish tone, as did the large US supply situation.
However, ongoing concerns about the political problems in Ukraine slowing exports out of the country tempered the declines, market watchers said.
WHEAT futures in the US were weaker as traders took profits following a recent rally to sharply higher prices. Chicago, Kansas City and Minneapolis futures finished nine to 16 US cents a bushel lower.
Reports that the political problems in Ukraine won’t likely cause disruptions to spring planting or harm production further undermined prices, said analysts.
However, ongoing worries about dry weather reducing winter wheat yields in some parts of the US Plains this spring limited the downside.
• According to the USDA, total export sales of US wheat were 556,100 tonnes during the week ended March 6. Wheat to be delivered in 2013/14 accounted for 476,900 tonnes, while 2014/15 delivery totalled 89,200 tonnes.
• FranceAgriMer estimated that soft wheat exports out of France would total 18.19 million tonnes this year, from their previous guess of 18.41 million tonnes. They upped their ending stocks estimated to 3.17 million tonnes, from 2.85 million.
• CME Group Inc. is planning on introducing a new ‘mini sized’ contract for Kansas City wheat futures. The new contract will begin on March 23, and March 24 for trade.
Settlement prices are in Canadian dollars per metric ton.
