By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 30 – ICE Futures Canada canola contracts closed fractionally firmer on Wednesday, after a day of quiet, choppy activity. The May contract was sharply higher due to short covering ahead of its expiry, said analysts.
Worries about planting delays in Western Canada, due to persisting cold, wet weather in some regions, were bullish for canola.
Further support came from continued ideas that canola is undervalued compared to other oilseeds.
On the other side, spillover pressure from the losses seen in Chicago soybean and soyoil futures was bearish for the market, as was profit taking on recent gains.
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A pickup in farmer selling, as they needed to generate cash flow and create bin space ahead of spring seeding also weighed on prices, as did the large Canadian canola supply situation.
About 13,528 canola contracts were traded on Wednesday, which compares with Tuesday when 23,409 contracts changed hands. Spreading accounted for 7,804 of the trades.
SOYBEAN futures at the Chicago Board of Trade were mixed on Wednesday, with the nearby May contract up four cents as traders exit the front month and losses of one to six cents in the more deferred months.
Profit-taking on recent advances accounted for some of the selling pressure in soybeans, according to traders. Forecasts calling for some drier weather over the next couple of days weighed on prices as well.
Tight nearby supplies remained supportive, as did ideas that the technical bias is still pointed higher for the time being.
SOYOIL futures were down sharply on Wednesday, taking some direction from the overnight losses seen in Malaysian palm oil. Adjustments to the soyoil/soymeal spread contributed to the declines.
SOYMEAL futures were stronger on Wednesday, boosted by good end user demand.
CORN futures in Chicago were down two to four cents per bushel on Wednesday, seeing some consolidation after prices hit their highest levels in eight months on Tuesday.
While corn seedings across the Midwest are running about a week behind normal, the forecasts are looking a little drier into the next week. With no fresh bullish news, the path of least resistance turned lower, said traders.
WHEAT futures in Chicago settled five to seven cents per bushel higher on Wednesday, as drought conditions across the Southern US Plains remained supportive. Kansas City wheat futures were up two to 12 cents, while Minneapolis spring wheat contracts were up nine to ten cents.
The Wheat Quality Council’s tour of Kansas continued to show disappointing yield prospects, and updated reports from the tour were behind much of the strength in the wheat market.
However, relatively favourable crop prospects for wheat crops elsewhere in the world did limit the advances. Profit-taking on recent gains also slowed the upward move.
• Roughly 5% of the Russian winter wheat crop suffered from winterkill this year, according to the country’s agriculture minister. That compares with 9.1% the previous year.
Canadian canola settlements are in Canadian dollars per tonne.
