By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 3 – ICE Futures Canada canola contracts moved lower on Monday, as logistics problems which are slowing the movement of canola out of Western Canada continued to weigh on the market.
Some downward spillover pressure also came from the weakness seen in Chicago soyoil futures, according to participants.
The upswing in the value of the Canadian dollar, which rose above 90 cents US, further undermined prices, as did the market’s ongoing bearish technical bias.
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Volumes were on the light side, which helped to exaggerate the declines, traders added.
However, sentiment that the market is oversold and ideas that canola is undervalued compared to other oilseeds limited the declines.
Canola futures also found some spillover support from the advances seen in Chicago soybean futures.
About 12,937 canola contracts were traded on Monday, which compares with Friday when 26,127 contracts changed hands. Spreading accounted for 10,818 of the trades.
Milling wheat, durum and barley futures were untraded following revisions to wheat after the close on Friday.
Soybean futures at the Chicago Board of Trade settled three to 10 cents per bushel higher on Monday, seeing some follow-through buying interest after moving above nearby support on Friday.
Expectations for tightening US ending stocks were also supportive, especially as export demand remains solid.
However, good weather conditions for soybeans across most of South America put some pressure on the soy market, as large supplies from the region will soon be displacing the US in the export market.
Activity was on the quieter side, with Chinese markets closed this week for the Lunar New Year holiday.
Soyoil futures were 14 to 19 points lower on Monday, despite the advances in soybeans. Positioning against soymeal accounted for some of the activity.
Soymeal futures were up four to eight dollars on Monday, following soybeans.
Corn futures in Chicago settled with small advances of about one to three cents per bushel on Monday, with Midwestern weather concerns behind some of the strength.
Forecasts calling for heavy snowfall across much of the US Corn Belt this week will slow country movement and could also lead to increased demand from the livestock sector.
Wheat futures in Chicago were up by about seven to eight cents per bushel on Monday, underpinned by good end user demand and supportive technicals. Minneapolis and Kansas City wheat futures were also up on the day, with increases of about four to nine cents.
The ability of the wheat market to hold above nearby lows on Friday was seen as supportive from a chart standpoint, which encouraged some of the follow-through buying interest on Monday.
Ideas that US wheat prices are looking more attractive in the international market were also supportive.
Weather conditions across the Midwest were mixed for wheat. While forecasts calling for cold temperatures were somewhat supportive, the latest weather patterns are also bringing snow and the likelihood of improved snow cover.
• India has denied charges from the US, Canada, and Pakistan at the World Trade Organization that the country was selling subsidized wheat and rice into the export market, according to local reports.
• Weakness in the Russian ruble is reported to be making wheat exports from the country more attractive to international buyers. The currency is currently trading at its weakest level relative to the US dollar since March 2009, according to a report from the Moscow Times.
Canadian canola settlement prices are in Canadian dollars per metric ton.
