By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
Feb. 14, 2014
Winnipeg – ICE Futures Canada canola contracts settled with small gains on Friday, seeing some consolidation to end the week after posting large losses recently.
Canadian and US markets will be closed Monday, and positioning ahead of the long weekend was a feature.
Speculators have put on large short positions in canola, and were covering some of those positions and booking some profits on Friday, according to traders.
Canola remains very cheap compared to most other oilseeds, and the oversold price sentiment helped underpin the futures as well, said participants.
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However, the failure to settle back above C$400 in the March contract was bearish from a technical standpoint, with the overall downtrend still intact. The ongoing logistics issues across Western Canada were also still limiting the end user demand.
A softer tone in CBOT soybeans and soyoil also served to temper the corrective bounce in canola.
About 41,525 canola contracts were traded on Friday, which compares with Thursday when a record 71,237 contracts changed hands. Spreading accounted for 35,410 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following Thursday’s close.
SOYBEAN futures closed two to seven US cents per bushel lower ahead of the long weekend, undermined by expectations of a large South American soybean crop. US markets will be closed on Monday for President’s Day.
Forecasts calling for beneficial precipitation in South American soybean growing regions this weekend added to the bearish tone.
Expectations that the USDA will project large US soybean acres for 2014/15 in their outlook conference next week also weighed on prices.
However, continued strong demand for US soybeans and their products, as well as tight domestic supply worries, limited the declines.
SOYOIL futures were 27 to 41 points lower on Friday, undermined by profit taking following recent strong advances, market watchers noted.
SOYMEAL futures closed US$2.80 lower to US$0.90 higher, as the market was consolidating following Thursday’s rally, brokers said.
Strong demand was supportive, while spillover from the losses in soybeans was bearish.
CORN futures were three to five US cents per bushel higher, as strong export and domestic demand for the US commodity helped to lift prices.
Some of the advances were also linked to chart-based buying after the market managed to close above technical resistance on Thursday, analysts said.
However, a pickup in farmer selling and talk that US corn supplies are ample helped to limit the advances.
WHEAT futures in the US were mostly higher, with Minneapolis and Chicago futures posting gains of one to four cents a bushel. Most Kansas City Board of Trade wheat futures moved higher, with the market closing anywhere from one-and-a-half cents lower to two cents higher.
Continued strong export demand was supportive for wheat futures. Some export demand for Canadian wheat was said to be shifting to the US due to slow shipments out of Canada.
Chart-based buying also fuelled some of the advances, participants said.
However, the large global supply situation helped to limit the gains.
• The Indian wheat crop is expected to produce 95.6 million tonnes of the commodity this year, up from 93.5 million tonnes last year, the country’s Agriculture Ministry said.
• A tender for about 43,000 tonnes of 12.5% protein Canadian Western Red Spring wheat was issued by Japan, with delivery expected in June 2014.
Settlement prices are in Canadian dollars per metric ton.
