By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Jan. 8 – The ICE Futures Canada canola market was stronger on Thursday, with the March contract finally settling above key resistance of C$450 per tonne. The market was trading above that level every day this week, but never managed to close above it.
The advances were linked to technical-based buying by speculators, with strength in Chicago soyoil also underpinning values.
Ongoing worries about unfavorable weather in Malaysia’s palm oil growing regions and signs that global oilseed demand is picking up added to the bullish tone.
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However, light farmer selling at the highs helped to limit the advances. Farmers have only been selling small amounts of canola, as elevators have widened basis levels in reaction to recent strength in the futures, brokers noted.
Spillover pressure from the declines seen in Chicago soybean futures was also bearish, as were generally good conditions for South American oilseeds.
About 25,423 contracts changed hands on Thursday, which compares with Wednesday when 21,569 contracts traded. Spreading accounted for 10,888 of the trades.
Milling wheat, durum and barley were all untraded, though the Exchange moved wheat prices lower after Thursday’s close.
SOYBEAN futures in Chicago ended seven to eight cents per bushel lower Thursday as analysts predicted Monday’s USDA crop production and monthly grain stocks report would show US farmers harvested a record 3.965 billion bushels of soybeans in the fall of 2014. Yields were also pegged at an all-time high of 47.7 bushels an acre.
US soybean stockpiles are expected to be at 402 million bushels by the end of August which is down from last month’s forecast of 410 million bushels.
Continued good weather for many South American soybean crops ahead of the upcoming harvest was also bearish.
Though, signs that export demand for US soybean supplies is strong were limiting the gains. Weekly USDA export sales data come in better than expected at over 900,000 tonnes.
SOYOIL futures ended 56 to 60 points higher, receiving support from Malaysian palm oil which is rising due to flooding in Southeast Asia.
SOYMEAL futures ended lower with spreading against soyoil a feature.
CORN futures in Chicago edged two to three cents per bushel lower Thursday as slumping gas prices reduced demand for ethanol. It was the third straight session CBOT corn faded in value.
Corn isn’t likely to survive above the US$4.00 per bushel level given the current economic conditions, said a trader.
Large funds were also active sellers as they rebalance their portfolios for the month of January, according to a report.
Some analysts are predicting the USDA will lower its estimate for last year’s corn production in the US. The January supply and demand report is due out Monday.
WHEAT futures in Chicago hit a six-week low on Thursday due to lukewarm export sales amid a firm US dollar. Values fell 11 to 12 cents per bushel on both the Kansas City and Chicago Board of Trade.
US wheat has been deemed too pricey by some foreign buyers who are buying cheaper supplies from France and sellers in the Black Sea region, participants said
Monday’s supply and demand report is expected to confirm a large global harvest of wheat will happen this year, according to an analyst.
– Ukraine’s agricultural ministry is scheduled to meet with exporters next week to come to an understanding on the amount of wheat exported this year. At this point, there are no plants to limit wheat sales, say participants.
– The Food and Agriculture Organization’s world food price index declined 3.2 points to 188.6 in the last month of 2014. However, prices for cereal grains inched upwards slightly.
– Egypt is reportedly shopping around for 55 thousand metric tonnes of wheat.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
