By Terryn Shiells , Commodity News Service Canada
Winnipeg, Feb. 18 – ICE Futures Canada canola contracts were sharply higher on Tuesday, following the strong gains seen in outside oilseed markets, including the Chicago soy complex.
Spillover support also came from the gains seen in Malaysian palm oil and European rapeseed futures.
Follow-through buying on Friday’s advances and short covering by speculative buyers also helped fuel the advances, analysts said.
Oversold price sentiment and continued ideas that canola is undervalued compared to other oilseeds added to the bullish tone.
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However, the stronger Canadian dollar and ongoing problems moving canola out of Western Canada helped to limit the advances.
About 38,562 canola contracts were traded on Tuesday, which compares with Friday when 41,525 contracts changed hands. Spreading accounted for 23,086 of the trades. Canadian markets were closed on Monday.
Milling wheat, durum and barley futures were untraded following revisions to wheat after the close on Friday.
SOYBEAN futures closed six to 24 cents US a bushel higher on Tuesday, underpinned by concerns about adverse weather conditions in South America.
Dry weather may have harmed production in Brazil recently, while there also worries about possible flooding due to recent rains in Argentina, market watchers said.
Continued solid demand for US soybeans, worries about tight supplies and firmness in the cash market added to the bullish tone.
However, forecasts calling for good Brazilian harvesting weather this week, and continued expectations that supplies out of the region will be large, were bearish.
SOYOIL futures were 106 to 121 points higher on Tuesday amid strong demand and spillover support from the gains seen in Malaysian palm oil futures.
SOYMEAL futures closed US$1.20 to US$6.90 higher, taking some direction from the gains seen in soybeans, traders said.
CORN futures were slightly higher, finding spillover support from the gains seen in soybeans and wheat. The futures were posting gains of three to five cents a bushel.
Good demand for US corn and concerns about slow movement out of the country due to adverse winter weather conditions were supportive.
However, reports that US supplies are ample and a recent pick up in farmer selling limited the upside.
WHEAT futures in the US were mostly stronger Tuesday, with Minneapolis, Kansas City and Chicago contracts posting gains of four to 13 cents US a bushel.
Follow-through buying on recent gains helped to lift prices, as did continued strong export demand. Concerns about tight supplies due to slow movement in the US were also bullish.
However, steady farmer selling in the US and the large global supply situation limited the advances.
• Glencore trading firm has secured a tender to supply 50,000 tonnes of wheat to Bangladesh, according to reports. The wheat is expected to come from India, market watchers said.
• Agriculture And Agri-Food Canada released updated supply and demand tables on Tuesday, lowering their wheat production estimate for 2014/15 (Aug/Jul) slightly. AgCanada expected 29.3 million tonnes of wheat, down slightly from the January estimate of 29.7 million and the 37.5 million produced in 2013/14.
• Agriculture and Agri-Food Canada pegged 2013/14 ending stocks of wheat at 11.8 million tonnes, up from their previous estimate of 11.5 million tonnes due to lower exports.
Canadian canola settlement prices are in Canadian dollars per metric ton.
