By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 23 – ICE Futures Canada canola contracts ended higher on Wednesday, following the advances seen in Chicago soybean and soyoil futures, analysts said.
Slow farmer selling, as they are waiting to be more confident in new crop prospects, was also supportive, as was oversold price sentiment.
Ongoing worries about lower yield potential for some western Canadian crops that were damaged by excess moisture, or dryness, added to the bullish tone.
However, weakness in outside oilseeds, including European rapeseed and Malaysian palm oil futures, limited the upside.
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Expectations that Canadian canola supplies will still be large in 2014/15 (Aug/Jul), despite production problems during the growing season, were also bearish.
About 20,233 contracts traded on Wednesday, which compares with Tuesday when 15,639 contracts changed hands. Spreading accounted for the bulk of the activity, accounting for 17,278 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchange made slight adjustments to wheat prices after Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, gaining 8 to 19 per bushel, as good export demand and oversold price sentiment provided support.
Long range weather forecasts calling for possibly damaging hot and dry conditions for the Midwest later in the growing season were somewhat supportive as well.
However, the soybean crop is still in good shape for the time being and the likelihood of a record large production did remain a bearish influence overhanging the market.
Ideas that the general technical trend is still pointing down, despite today’s bounce, limited the gains as well, according to participants.
SOYOIL futures were higher on Wednesday, following soybeans.
SOYMEAL futures were stronger on Wednesday, as solid export demand helped meal see the biggest gains of the soy complex. The USDA reported export sales of over 400,000 tonnes of US soymeal for delivery in the upcoming crop year.
CORN futures in Chicago up one to two cents per bushel at Wednesday’s close, as end-user bargain hunting and oversold technical signals helped the market see a modest correction off of the fresh four-year lows hit earlier in the session.
Concerns that hot and dry weather could hurt the yield potential later in the summer were also somewhat supportive for corn, although nearby conditions remain favourable.
The US corn crop was rated 76% good-to-excellent in the latest weekly report, which was unchanged from the previous week but still well ahead of normal for this time of year and the best ratings in more than a decade.
WHEAT futures in Chicago closed five to six cents per bushel higher on Wednesday, seeing a correction off of the fresh contract lows hit at one point during the session. Kansas City futures were up two to seven cents, while Minneapolis spring wheat contracts were steady to two cents higher.
Ideas that US wheat is starting to look more attractively priced to export customers contributed to the gains, although any fresh export news was lacking.
The advancing US winter wheat harvest and improving conditions for the country’s spring wheat crop put some pressure on values, limiting the gains.
• Egypt purchased 235,000 tonnes of wheat from Russia, Romania, and Ukraine in its latest tender.
• Hot overnight temperatures and a poor monsoon season were hurting crop prospects in India, according to reports from the country.
• Argentina is reportedly sitting on 1.7 million tonnes of wheat that can’t be exported, as the country’s export quota of 1.5 million tonnes has already been filled.
