By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
April 7, 2014
Winnipeg – ICE Futures Canada canola contracts posted solid gains on Monday, as speculative fund buying helped prices test nearby chart resistance to settle at their highest levels in nearly three weeks.
Talk of improving demand from the commercial sector was also supportive, as the logistics issues in Western Canada start to show signs of sorting themselves out and canola remains underpriced compared to other oilseeds.
However, canola did run into resistance at the highs. Scale-up farmer selling, the firmer Canadian dollar, and spillover from the losses in the CBOT soy complex all served to limit the gains, according to participants.
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About 29,611 canola contracts were traded on Monday, which compares with Friday when 16,048 contracts changed hands. Spreading accounted for 18,120 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Friday’s close.
WHEAT futures in Chicago rose six to nine cents on Monday as little rain fell in western portions of the US southern Great Plains.
Winds are expected to pick up in the coming days along with continued dryness, said a private weather broadcaster.
Crop condition ratings in Kansas, Oklahoma and part of Texas have been under pressure due to the dry weather.
Technical buying helped support the market in the lead-up to the release of the monthly USDA supply/demand report, said an analyst.
CORN futures in Chicago settled one to two cents lower Monday as projected dry, warm weather is expected to aid planting efforts in the southern portion of the US Corn Belt. Rain has delayed much of the field-work up to now, but that precipitation is expected to lessen over the week.
Lower acreage expectations imply that yields will need to be good to keep higher supplies in the market, said an analyst, who noted that colder-than-normal weather could delay planting.
SOYBEAN futures at the Chicago Board of Trade were down nine cents Monday, as a rise in imports from international markets is expected to bolster the US supply.
Brazil soybeans could arrive at US crushing facilities within the next few weeks, said an analyst.
China is expected to start crushing soybeans imported from the US in the next couple of weeks.
SOYOIL futures were 14 points lower on Monday as Malaysian tropical oil grew more expensive for overseas investors and refiners due to a stronger local Malaysian currency.
SOYMEAL futures were four dollars lower on Monday.
– China is reportedly looking abroad for farmland, after an internal report determined roughly two percent of the country’s arable land is too polluted for farming.
– Bunge Brazil reportedly plans to invest US$200 million in the construction of a new flour mill near Rio de Janeiro.
– Egypt’s 2014-15 wheat imports will top 10 million tonnes according to a new survey of traders on the Egyptian wheat market.
Settlement prices are in Canadian dollars per metric ton.
