By Terryn Shiells and Marney Blunt, Commodity News Service Canada
WINNIPEG, August 6 – ICE Futures Canada canola contracts ended firmer on Wednesday, taking some direction from the gains seen in the Chicago soy complex, analysts said.
Though, cautiousness ahead of next Tuesday’s monthly USDA report helped to limit the upside.
Traders were also waiting to see what the weather will do until harvest in both the US and Western Canada before making any big moves, brokers said.
A lack of aggressive selling from farmers and the funds was helping to underpin the market, as were worries about problems in Ukraine and Russia possibly disrupting agricultural exports out of the region.
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However, forecasts calling for beneficial weather for oilseed crop development in North America this week were bearish.
The upswing in the value of the Canadian dollar also weighed on prices.
About 11,506 contracts traded on Wednesday, which compares with Tuesday, when 18,538 contracts changed hands. Spreading accounted for 3,582 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchange moved wheat prices higher following Wednesday’s close.
SOYBEAN futures in Chicago closed higher on Wednesday, despite beneficial weather conditions and forecasts of a higher yield, analysts say. Short-covering on recent losses helped to underpin prices.
Global equity markets took on a lower track in overnight and early morning trades, with many foreign indices playing catch-up to late-day weakness in the U.S. yesterday.
Risk-taking sentiment is being held back by geopolitical concerns over Russian troops building up on the Ukrainian border as well as reports that Russia may retaliate against sanctions made against Russia by the U.S. and the EU over Russia’s support of Ukrainian rebels.
SOYOIL futures in Chicago closed higher on Wednesday, following soybeans.
SOYMEAL futures were higher on Wednesday.
CORN futures in Chicago rose on signs of improving demand for U.S. supplies after the price on Friday fell to the lowest level since June 2010, brokers say.
U.S. exporters sold 160,000 metric tonnes of corn to Colombia for delivery in the 2014/15 season, according to a Wednesday report from the USDA.
Corn was range-bound yesterday with pressure coming from favourable rainfall in parts of Iowa, Minnesota, Missouri and Illinois that will help stabilize crops that have dried out in July, but support continues to be found as some traders head to the sideline ahead of the August 12 USDA report. Some analysts are expecting record yields and production for the U.S. corn crop.
WHEAT futures in Chicago were higher for a sixth straight session on Wednesday amid adverse weather in the key European growing areas that may push exporters of the grain to buy from the U.S., traders say.
Harvest in France, Germany and several other European countries has been slowed down due to persistent rainfall, forecasters say, as the abundant precipitation has damaged much of the crop. More rain is expected this weekend, however there is some drier weather forecast to move into western Europe next week.
In the past two weeks, demand for U.S. wheat has improved after last month reached the lowest level in more than four years, brokers say. Wheat futures have plummeted in the last three months on speculation that global inventories would rise amid favourable growing seasons in exporting countries.
Wheat futures also gained due to the rising geopolitical tensions between Russia and Ukraine, as Russia reportedly put another 20,000 troops on the border as Ukraine’s army and pro-Russian separatists’ battle for control of the key cities in eastern Ukraine. Both Russia and Ukraine are large producers and shippers of wheat.
• Iran has bought 50,000 metric tonnes of Black Sea Wheat as the Islamic Republic attempts to bolster from global markets due to a lower than expected domestic harvest.
• Despite political tensions and economic sanctions, both Russia and Ukraine are poised for strong sales campaigns with their near-record harvests set to beat struggling French wheat in key world markets.
• In Paris, Euronext wheat futures rose sharply in early trade on Wednesday on reports that the market’s two delivery silos would revise their quality requirement to preserve milling quality.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
