By Terryn Shiells, Commodity News Service Canada
Winnipeg, Feb. 19 – ICE Futures Canada canola contracts were firmer on Wednesday, as speculators continued to cover their short positions, analysts said.
Further support came from the sharp downswing in the value of the Canadian dollar, which made canola more attractive to crushers and exporters. The Canadian dollar lost almost a full cent against the US dollar amid disappointing Canadian wholesale sales data.
Continued ideas that canola is undervalued compared to other oilseeds also underpinned the market.
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However, ongoing logistics problems moving canola supplies out of the Prairies continued to overhang the market.
Spillover pressure from the declines seen in the Chicago soy complex and a pickup in farmer selling in Western Canada were also bearish.
About 19,392 canola contracts were traded on Wednesday, which compares with Tuesday when 38,562 contracts changed hands. Spreading accounted for 14,394 of the trades.
Milling wheat, durum and barley futures were untraded following revisions to wheat after the close on Tuesday.
SOYBEAN futures closed unchanged to seven cents US a bushel lower on Wednesday, undermined by profit taking following Tuesday’s rally.
Renewed concerns about China cancelling US soybean orders and continued expectations of large soybean supplies from South America added to the bearish tone.
Signs that demand is starting to slow down for US soybeans, due to recent high prices, also weighed on values, analysts said.
However, ongoing worries about the tight US soybean supply situation limited the downside.
SOYOIL futures were seven to 14 points lower, following the softer tone seen in Malaysian palm oil futures during overnight activity, participants said.
The taking of profits following the huge advances seen on Tuesday was also responsible for some of the weakness.
SOYMEAL futures closed US$0.10 to US$3.90 softer, taking some direction from the losses seen in soybeans. Profit taking following Tuesday’s gains was also bearish, brokers added.
CORN futures were firmer in Chicago, seeing gains of three to five cents a bushel as the market followed wheat values to higher ground.
Tuesday’s strong export inspections data from the USDA continued to underpin prices, as did steady demand from the ethanol and export sectors.
The USDA reported on Tuesday that 827,610 tonnes of corn were inspected for export this week, up from the previous week’s total of 695,181 tonnes.
However, the large US corn supply situation served to temper the advances.
WHEAT futures in the US were firmer on Wednesday, with gains of one to eight cents a bushel being seen on the Minneapolis, Kansas City and Chicago contracts.
Continued strong demand for US wheat from the export sector helped to push prices higher, analysts said.
Concerns about cold weather and dry conditions reducing US winter wheat yields this year also fuelled some of the advances, as did worries about tight wheat supplies in the US.
But, there are very large supplies of wheat globally, which helped to limit the gains.
• France’s 2014/15 soft wheat crop was rated as 76 per cent in excellent condition in January, down from 79 per cent in December, the country’s government reported.
• German officials reported about 250,000 tonnes of wheat were shipped for export in January, with 195,000 tonnes heading to Iran due to the easing of international sanctions.
• Indian grain exports, including corn, wheat and rice, are expected to drop 29 per cent to 13.5 million in 2014/15, despite a record large wheat crop, USDA data shows.
