By Terryn Shiells, Commodity News Service Canada
Winnipeg, March 5 – ICE Futures Canada canola contracts moved higher on Wednesday, lifted by spreading against other oilseeds. Traders were said to be selling soybeans and soyoil, and buying canola, according to analysts.
Continued ideas that canola is undervalued compared to other oilseeds also helped to lift prices, as did talk that the logistics problems in Western Canada have largely been priced into the market.
Chart-based buying, as the recent rally has shifted the technical bias to the upside, was also responsible for some of the upward price action.
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However, the upswing in the value of the Canadian dollar helped to limit the gains, as did profit taking and farmer selling at the highs of the day.
About 30,374 canola contracts were traded on Wednesday, which compares with Tuesday when 27,755 contracts changed hands. Spreading accounted for 15,688 of the trades.
Milling wheat, durum and barley futures were untraded following price revisions to wheat after the close on Tuesday.
SOYBEAN futures closed two cents US a bushel lower, to three cents higher on Wednesday. Downward pressure came from news of a cancellation of US soybeans by China, analysts said. China reportedly cancelled 245,000 tonnes of US beans that were supposed to be delivered in 2013/14.
Profit taking following Tuesday’s gains, easing concerns about the Russia Ukraine turmoil and reports of good harvest progress in Brazil were also bearish.
On the other side, continued worries about the tight US supply situation and expectations that the March 10 USDA report will show increased usage of US beans were bullish.
Private estimates calling for a smaller than first anticipated South American soybean crop also helped to support the market, brokers added.
SOYOIL futures were 14 to 31 points lower, undermined by profit taking following Tuesday’s sharp advances, according to market watchers.
SOYMEAL futures closed US$1.10 lower to US$2.10 higher, amid spreading against soyoil, said traders.
CORN futures were one to four cents US a bushel lower Wednesday, consolidating following the rally seen earlier in the week, brokers said.
Profit taking following the strong advances seen earlier this week, as concerns about political problems in Ukraine ease, was bearish. A pickup in farmer selling and the large US supply situation also weighed on prices.
However, continued strong export and domestic demand for US corn was supportive, as were expectations of a smaller Brazilian corn crop due to weather problems.
WHEAT futures in the US were mixed, as Minneapolis futures were one to eleven US cents a bushel higher and Kansas City futures were one cent lower to two cents higher. Chicago futures finished one to three cents US a bushel lower.
Ideas that the markets were overbought and profit taking following a recent rally were bearish.
Further downward pressure came from talk that the political problems in Ukraine haven’t had a big effect on exports out of the region yet.
On the other side, continued strong global demand for wheat helped to support the futures markets. Traders were also being cautious as the situation in Ukraine could get worse.
• Reports show that Algeria purchased 500,000 tonnes of optional origin milling wheat for delivery shipment in May at a cost of US$311 per tonne.
• Ukraine’s wheat crop is said to be facing drought conditions in central and eastern areas.
