By Phil Franz-Warkentin, Commodity News Service Canada
October 30, 2014
Winnipeg – ICE Futures Canada canola market moved sharply higher for the fourth-straight session on Thursday, recovering from earlier profit taking declines as the path of least resistance appears to be pointed up for the time being.
Canola has rallied for most of the past week and was thought to be due for a correction from a chart standpoint. Losses in CBOT soybeans did put some spillover pressure on canola to start the day. An increase in farmer selling, as producers take advantage of the recent strength in the market, contributed to the early declines.
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However, the nearby technical bias has shifted to the upside for canola, which made the losses a good buying opportunity. Solid end user demand, especially from domestic crushers, helped give canola a boost as well, according to participants.
About 30,500 canola contracts were traded on Thursday, which compares with Wednesday when 32,146 contracts changed hands. Spreading accounted for 17,158 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down 8 to 20 cents per bushel on Thursday, seeing a profit-taking correction following yesterday’s rally.
While the charts remain pointed higher, the need to book some profits ahead of the month end weighed on values today.
Relatively favourable harvest weather across the Midwest put further pressure on the soy market, with farmers expected to make some good progress over the next few days.
SOYOIL futures edged up on Thursday, with spreading against soymeal behind some of the strength.
SOYMEAL futures down sharply on Thursday, taking back most of Wednesday’s gains.
CORN futures in Chicago narrowly mixed on Thursday, although the bias was slightly lower in the most active nearby months at the close.
While profit taking and the good Midwestern harvest weather did put some pressure on corn values, a lack of significant farmer selling on the other side did provide some support. Good demand from the ethanol sector was also underpinning values, according to participants.
In other news, a report from the International Grains Council pegged this year’s global corn production at 980 million tonnes. That’s up by six million tonnes from a previous estimate.
WHEAT futures in Chicago were down one to two cents per bushel on Thursday, after trading to both sides of unchanged in narrow, range-bound dealings throughout the session.
Speculative short-covering did provide some support, while improving moisture conditions for the US winter wheat crop weighed on values overall.
The International Grains Council raised its projections on the size of the global wheat crop by one million tonnes, to 718 million.
Settlement prices are in Canadian dollars per metric ton.
