By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, April 14 – ICE Futures Canada canola contracts closed firmer on Monday, following other commodity markets, as they rose with concerns about rising political tension between Russia and Ukraine. The political problems are sparking worries that exports of wheat and other commodities out of Ukraine will be halted, and production may also be affected.
Short covering following recent losses and ideas that canola is undervalued compared to other oilseeds added to the bullish tone, analysts said.
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However, expectations of large 2013/14 Canadian canola carryout stocks and ideas that growers will plant more acres to canola this spring were bearish.
Activity was on the quiet side on Monday. About 14,053 canola contracts were traded on Monday, which compares with Friday when 20,251 contracts changed hands. Spreading accounted for 9,798 of the trades made.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted wheat and barley prices after the close on Monday.
WHEAT futures in Chicago rose 15 to 18 cents a bushel on Monday while contracts in Kansas City rose 14 to 15 cents a bushel as continued turmoil in Ukraine raised concerns that wheat exports out of the country may be slowed.
Political uncertainty and the threats of violence have caused Ukraine’s currency to fall, prompting many farmers to hang onto their existing grain. The situation has also made it tough for many of them to get additional seeds or fertilizer, said analysts.
Farmers in the southern US plains are watching anxiously as cold temperatures are setting in to the red winter wheat belt this week, which added to the bullish tone.
Hard freeze warnings have been issued for western Oklahoma and northern Texas.
SOYBEAN futures at the Chicago Board of Trade settled higher Monday as demand remained steady for US supplies.
Support came from spillover buying from wheat and corn. The market also remained bullish due to tight old crop supplies.
However worries about slowing Chinese demand put pressure on the market. Some speculative and producer selling could occur over the next few days, said an analyst.
SOYOIL futures were slightly higher Monday, following the advances seen in soybeans, traders said.
SOYMEAL futures ended higher, underpinned by steady global demand, brokers said.
CORN futures in Chicago climbed three to four cents higher Monday, as strong weekly inspection data helped them settle into the higher part of their range, according to an analyst.
Worries about planting delays in the US were also bullish. Six inches of rain in Iowa and ample precipitation in Illinois kept farmers from applying fertilizer or carrying out other field work needed ahead of planting season.
Only one to five percent of the 2014/15 corn crop has been seeded so far, the USDA said in a report.
• France exported 315,000 tonnes of soft wheat to Egypt in February, according to a report. That’s the largest shipment to the Middle Eastern country so far this year.
• India’s wheat supplies are attracting increased demand as they are at least $10 per tonne tonne cheaper than supplies from the Black Sea, said traders.
• Algeria bought 450,000 tonnes of wheat from France recently. The purchase could be politically motivated, said analysts, as presidential elections are on the horizon, and the ruling administration may want to stock up on wheat supplies before that happens.
ICE Futures Canada settlement prices are in Canadian dollars per tonne.
