By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
WINNIPEG, Oct. 22 – ICE Futures Canada canola contracts ended sharply higher on Wednesday, underpinned by speculative short covering after the market broke above the 30-day moving average, analysts said.
Some spillover support also came from the advances in Malaysian palm oil, Chicago soyoil and European rapeseed futures.
Canola was trying to catch up with the sharp gains seen in US soybean markets on Tuesday and early Wednesday, though soybeans turned lower at Wednesday’s close.
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Talk that Canadian canola production will be larger than the most recent Statistics Canada guess of 14.1 million tonnes helped to limit the gains.
Farmer selling and profit taking at the highs of the day also weighed on values.
About 30,926 contracts traded on Wednesday, which compares with Tuesday when 18,774 contracts changed hands. Spreading was a feature of the activity, as traders rolled out of the November contract ahead of its expiry.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted milling wheat and barley prices after Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade were down one to two cents per bushel on Wednesday, retreating from earlier gains by the close.
Soybeans started the day on a firmer footing, rising as much as 18 cents per bushel in the front month as solid export demand provided support. The USDA reported that private exporters had sold 419,000 tonnes of US soybeans to China and an additional 113,000 tonnes to unknown destinations, for delivery during the current crop year.
However, improving harvest weather across the Midwest weighed on values, according to participants. With the US set to harvest a record large soybean crop this year, any gains were seen as a selling opportunity.
SOYOIL futures were up on Wednesday, with activity in the outside vegetable oil markets and spreading against soymeal behind some of the strength.
SOYMEAL futures were lower by Wednesday’s close, retreating from earlier gains in sympathy with soybeans.
CORN futures in Chicago settled one to three cents per bushel lower on Wednesday, also correcting from earlier gains.
While the US corn harvest is running behind the average, the improving weather forecasts and record production prospects put some pressure on values.
WHEAT futures in Chicago were up two to three cents per bushel on Wednesday, with good end user demand behind some of the strength. Kansas City futures settled with similar gains, while Minneapolis hard red spring wheat was steady to down by less than a cent in most months.
The slow pace of the US soybean and corn harvest provided some spillover support for wheat, as soft winter wheat plantings have been delayed in some cases, according to reports. However, crop conditions for the hard winter wheat grown in the Southern Plains are looking favourable, which tempered the gains.
The relatively large global wheat situation also put some pressure on values.
– Egypt purchased 180,000 tonnes of wheat from France, Romania, and Russia in its latest weekly tender.
– Paraguay’s wheat harvest was 98% complete, although production is only pegged at 1.4 million tonnes in the South American country, according to reports.
– Roughly 93% of intended winter wheat acres in Ukraine have now been seeded, according to reports, despite cooler temperatures that delayed plantings earlier in the month.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
