By Terryn Shiells, Commodity News Service Canada
WINNIPEG, May 14 – The ICE Futures Canada canola market ended stronger on Thursday, after a day of choppy two-sided activity. Most the advances came during the last few minutes of trade.
Values were underpinned by spillover buying from the sharp rally seen in US wheat futures.
Some support for canola also came from the weaker Canadian currency, as it made the commodity more attractive on the international market.
Strength in outside oilseeds and the need to keep weather premiums built into the market were supportive as well.
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Though, expectations that there will be an increase in old crop farmer sales coming over the next few days in Western Canada were bearish.
Reports that seeding is going ‘extremely well’ across the Canadian Prairies also limited the advances, analysts said.
About 19,633 contracts traded on Thursday, which compares with Wednesday when 13,876 contracts changed hands. Spreading was a feature of the activity.
Milling wheat, durum and barley futures were untraded. Though, the Exchange moved wheat prices sharply higher, and barley lower after Thursday’s close.
Chicago soybean futures were steady to three cents US per bushel higher on Thursday, finding support from the gains in wheat and corn.
A softer US dollar index also underpinned values, as did steady demand for the US oilseed and worries about tight old crop supplies in the US.
Though, the large South American crop and generally favourable weather for US soybean crops limited the upside, analysts said.
Expectations of record large US soybean acreage this spring were also bearish. Private firm Informa pegged 2015 US bean area at a record large 87.2 million acres.
SOYOIL futures moved slightly higher Thursday, driven by the rally in wheat.
SOYMEAL futures ended nearly unchanged Thursday amid a lack of fresh news.
CORN futures in Chicago finished five to six cents US per bushel higher Thursday, following the gains seen in wheat, brokers said.
Short covering following recent losses added to the bullish tone, as did news that Informa lowered their US corn acreage estimate by 767,000 acres to 88.7 million.
Though, generally good weather for the 2015 US corn crop limited the upside, as did the large global supply situation.
WHEAT futures in the US closed 25 to 33 cents US per bushel higher on Thursday, with technical based buying behind the advances.
Traders were covering short positions amid sentiment that the market is oversold after recently hitting five-year lows, brokers said.
Concerns about excessive rain bringing disease problems to some wheat crops in the southern US plains further underpinned values, as did weakness in the US currency.
Traders were also worried about a developing El Nino weather pattern, as it could hurt wheat crops in other parts of the world, such as Australia.
• Japanese buyers are looking to purchase 111,100 metric tons of food wheat. The majority is expected to come from Canada, with the rest coming from the US and Australia.
• The USDA said 257,400 tonnes of wheat were sold for export during the week ended May 7, 2015. Old crop accounted for 115,400 tonnes, with 142,000 tonnes of new crop.
• Spring wheat acreage was estimated at 13.219 million in the US for 2015/16 by private firm Informa, which was up from their previous estimate of 12.969 million.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
