By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 3 – ICE Futures Canada canola contracts climbed higher on Thursday, finding spillover support from the gains seen in Chicago soybeans and soyoil.
Signs of improvement within Canada’s backlogged grain handling system further underpinned prices, as did speculative-based buying.
Good demand from crushers, as margins have improved lately, added to the bullish tone, as did continued ideas that canola is undervalued compared to other oilseeds.
However, a pickup in farmer selling at the highs and ahead of spring seeding helped to limit the advances.
Read Also
ICE Canola Midday: Larger crop weighs on prices
By Glen Hallick Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange were lower late Wednesday morning, following…
Expectations of large Canadian canola carryout supplies this year, and an increase in Canadian canola acreage this spring, were also bearish.
About 14,517 canola contracts were traded on Thursday, which compares with Wednesday when 33,641 contracts changed hands. Spreading accounted for 12,528 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted prices after the close on Thursday.
SOYBEAN futures at the Chicago Board of Trade were up three to 13 cents per bushel on Thursday, seeing a correction from yesterday’s losses.
Tightening old crop US soybean supplies remained a supportive factor in the market, with the premium for old crop soybeans widening out over the new crop months.
Large South American crop prospects, together with the continued possibility of Chinese cancellations and the likelihood of increased US acres this year all served to limit the upside potential.
SOYOIL futures were up on Thursday, posting the biggest gains of the soy complex as solid weekly export sales provided support.
SOYMEAL futures were higher on Thursday, following soybeans and soyoil.
CORN futures in Chicago were three to four cents per bushel stronger on Thursday, retesting the US$5.00 per bushel level in the May contract after dropping sharply with profit-taking on Wednesday.
Heavy rains across parts of the Midwest contributed to the firmer tone in corn, as the precipitation at this time of year is slowing spring field work. However, the moisture will be beneficial for yields in the long run, which tempered the upside potential.
WHEAT futures in Chicago settled six to eight cents per bushel higher on Thursday, as renewed drought concerns in the Southern Plains provided support.
The latest report from the US Drought Monitor showed that 99% of Kansas was considered to be suffering from drought conditions, as of April 1. That compares with 91% the previous week in the country’s largest wheat producing state.
While some rain has since fallen on some eastern parts of Kansas, the moisture missed the drier areas in the west.
Conditions for wheat crops in Oklahoma were also deteriorating, with 51% of the state considered to be in some kind of drought.
• Weekly US wheat export sales were reported at 336,400 tonnes for delivery in the current crop year and at 310,500 tonnes for 2014/15. The combined sales were in line with trade estimates.
• Wheat acreage in the US Pacific Northwest is forecast to decline by 3% in 2014, according to a report from the USDA. Better prices for other crops were likely behind the move, according to some analysts.
• Global food prices hit their highest levels in ten months in March, according to a report from the UN’s Food and Agriculture Organisation. Weather concerns and the political issues in Ukraine were tied to the 2.3% increase in the index from the previous month.
ICE futures Canada settlement prices are in Canadian dollars per metric ton.
