By Phil Franz-Warkentin, Commodity News Service Canada
October 29, 2014
Winnipeg – ICE Futures Canada canola market moved sharply higher on Wednesday, as a rally in the CBOT soy complex provided the catalyst for some speculative short covering in the Winnipeg market as well.
Soymeal led to the upside in the US, due to tight
supplies of the livestock feed and logistics issues in the Midwest, said traders. Soybeans and soyoil were also higher, while overnight advances in Malaysian palm oil and European rapeseed contributed to the general strength in the oilseeds.
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Speculative short covering was a feature of the canola trade, as some buy stops were hit and the funds worked to cover some of their large short positions, according to a broker.
The rally did encourage some farmer selling on the other side, which tempered the gains.
The advancing US soybean harvest and improving weather conditions for soybeans in Brazil were also said to have put some pressure on values.
About 32,146 canola contracts were traded on Wednesday, which compares with Tuesday when 34,283 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were up 29 to 36 cents per bushel on Wednesday, as gains in soymeal pulled the rest of the soy complex up as well.
Soymeal rose by over US$22 per hundredweight in the front month, with tight nearby supplies of the livestock feed in the cash market heightening the demand from crushers for beans to process. Rail car shortages were also partially to blame, as the logistics issues slow movement across the Midwest.
A lack of farmer selling, as US producers focus on the harvest, was also supportive for beans, but the expectations for a record large crop when all is said and done did limit the advances.
SOYOIL futures were up on Wednesday, with gains in outside vegetable oil markets contributing to the strength.
SOYMEAL futures up sharply on Wednesday, and saw the biggest gains of the soy complex.
CORN futures in Chicago were up seven to 11 cents per bushel on Wednesday.
However, the advancing US harvest did slow the gains as weather forecasts across the Midwest remain favourable through the weekend.
WHEAT futures in Chicago were up five to eight cents per bushel on Wednesday, taking some direction from the gains in corn and soybeans.
Ideas that the slower-than-normal pace of the Midwestern soybean and corn harvest will limit winter wheat plantings in some areas contributed to the strength in wheat, according to participants.
Weather concerns in Russia and Australia were also underpinning wheat. However, world supplies remain more than sufficient to meet demand.
Settlement prices are in Canadian dollars per metric ton.
