By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 6 – ICE Futures Canada canola contracts were firmer on Thursday, following the sharp gains seen in Chicago soyoil and soybean futures.
Strong demand for US soybeans and soyoil, as confirmed in the USDA’s weekly export sales report on Thursday, lifted the Chicago futures.
Canola values were also underpinned by spillover support from the advances seen in Malaysian palm oil and European rapeseed futures.
Continued ideas that canola is undervalued compared to other oilseeds kept a firm floor under the market.
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However, slow usage of canola due to logistics problems moving supplies out of Western Canada continued to overhang the market.
The upswing in the value of the Canadian dollar was also bearish.
About 28,679 canola contracts were traded on Thursday, which compares with Wednesday when 21,390 contracts changed hands. Spreading accounted for 25,576 of the trades.
Milling wheat, durum and barley futures were untraded following revisions to wheat after the close on Wednesday.
Soybean futures at the Chicago Board of Trade were five to 12 cents per bushel higher on Thursday, with solid weekly export demand behind some of the buying interest.
Weekly US soybean export sales came in at about 577,000 tonnes for the week ended January 30, which was well above the level seen the previous week. China was a major buyer, which was said to have alleviated some of the concerns over possible Chinese cancellations.
However, good weather conditions for soybeans across most of South America did limit the upside potential, especially as cheaper supplies from the region will soon be competing with the US in the international market.
Profit-taking at the daily highs also put some pressure on values.
Soyoil futures were up by as much as 45 points on Thursday, boosted by the gains in soybeans and Malaysian palm oil.
Soymeal futures were up in sympathy with the rest of the soy complex on Thursday, posting gains of US$2.00 to US$4.00.
Corn futures in Chicago settled narrowly mixed on Thursday, lacking any clear direction as the commodity consolidated within a narrow range of a quarter cent lower to just over a cent higher.
Weekly US export sales of over 1.7 million tonnes were supportive for corn, according to participants.
However, the large US supply situation and looming South American crops did temper the upside potential.
Wheat futures in Chicago were down by six to seven cents per bushel on Thursday, seeing a bit of a correction after posting good gains earlier in the week. Kansas City Hard Red Winter Wheat was down by a similar amount, while the Minneapolis futures were mixed. March wheat in Minneapolis saw an eight cent short-covering bounce higher, while the more deferred months were all down.
Improving US winter wheat crop prospects, as recent snowfall should help alleviate concerns over possible winterkill in some areas, added to the softer tone in the winter wheat contracts.
On the other side, solid weekly US export sales did provide some underlying support.
• Japanese wheat importers have said they will be purchasing more US wheat over Canada, as logistics issues have caused delays for Canadian shipments.
• India’s wheat crop may be on pace to hit a new record this year, according to market participants in the country citing a large planted area and good growing conditions.
Canadian canola settlement prices are in Canadian dollars per metric ton.
