By Terryn Shiells, Commodity News Service Canada
Winnipeg, Feb. 20 – ICE Futures Canada canola contracts were little changed on Thursday, after chopping around on both sides of unchanged throughout the day.
Continued support came from short covering after the sharp losses seen last week, as well as sentiment that canola is undervalued compared to other oilseeds.
Spillover support also came from the strength in Chicago soybean and soyoil values, analysts said.
The downswing in the value of the Canadian dollar, which was holding just above the 90 cents US mark, was also bullish. The weaker Canadian currency made canola more attractive to crushers and exporters.
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On the other side, continued logistics problems were curbing the usage of western Canadian canola, which weighed on the market.
A pick up in farmer selling into the cash pipeline across the Prairies, due to recent higher prices and warmer weather, was also bearish.
About 26,443 canola contracts were traded on Thursday, which compares with Wednesday when 19,392 contracts changed hands. Spreading accounted for 18,738 of the trades.
Milling wheat, durum and barley futures were untraded following revisions to wheat after the close on Wednesday.
SOYBEAN futures closed four to 11 cents higher, with stronger gains seen in new crop values due to a supportive acreage outlook from the USDA.
The USDA pegged 2014/15 US soybean acreage at 79.5 million acres at their outlook forum, which was below expectations, according to analysts.
The soybean market was also supported by worries about adverse weather conditions in Brazil. Areas needing rain are still too dry, while areas that need dry weather are experiencing precipitation.
However, profit taking and a pick up in farmer selling following recent gains were bearish, as were worries about possible Chinese cancellations of US beans.
SOYOIL futures were 26 to 33 points higher, following the gains seen in outside vegetable oil markets, including Malaysian palm oil futures, traders said.
SOYMEAL futures closed US$2.10 softer to US$1.80 higher after a day of choppy activity. Some support came from the gains seen in soybeans, brokers noted.
CORN futures were little changed in Chicago, trading anywhere from unchanged to two cents a bushel amid choppy activity.
Ideas that export demand for US corn may become even stronger due the unrest in Ukraine were supportive, as was the USDA’s projection that 92 million acres of corn would be planted this spring.
On the other side, ample corn supplies in the US and a pickup in farmer selling into the cash pipeline were bearish, brokers noted.
WHEAT futures in the US were mixed, with Minneapolis, Chicago and Kansas City futures trading four cents a bushel lower to three cents higher.
Downward pressure came from the USDA’s projection that cash prices for wheat would be significantly lower in 2014/15 due to increasing global production.
Profit taking and a pickup in farmer selling following a recent rally was also bearish, as was the large global supply situation.
On the other side, solid export demand and some concerns about cold weather reducing US winter wheat yields were bullish, market watchers said.
• The USDA pegged 2014/15 planted acreage at 55.5 million acres for wheat in the US, with 41.892 million acres of winter wheat and 13.608 million of spring and durum. Spring and durum wheat acreage in 2013/14 was 13.066 million.
• France’s winter wheat crop was reported as being 87 per cent in the tillering stage, up from 75 per cent at the same time last year, FranceAgriMer reported.
• According to Kazakhstan’s Statistics Agency, grain production out of the country is expected to be 18.2 million tonnes in 2013/14, down from a previous estimate of 19.0 million.
• Stocks of grain in Russia were reported at 25.3 million tonnes as of February 1, the country’s government reported.
