By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, March 18 – ICE Futures Canada canola contracts were higher Tuesday, finding spillover support from the gains seen in Chicago soybeans and soyoil futures.
Continued speculative based buying and the sharp downswing in the value of the Canadian dollar added to the bullish tone.
A pickup in commercial demand, as logistics problems start to improve in Western Canada, also lifted the market, analysts said.
However, prices were starting to look more attractive to farmers, which sparked some selling that limited the upside in canola.
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Weakness in Malaysian palm oil and European rapeseed futures also weighed on canola.
About 20,835 canola contracts were traded on Tuesday, which compares with Monday when 22,258 contracts changed hands. Spreading accounted for 15,196 of the trades.
Durum and barley futures were untraded and unchanged. Milling wheat prices were also untraded, though the Exchange adjusted prices after the close Tuesday.
SOYBEAN futures at the Chicago Board of Trade settled nine to 27 cents per bushel higher on Tuesday, as strong demand and concerns over tightening US supplies provided support.
Weekly US soybean export inspections, of just under a million tonnes, were behind some of the early strength in the futures, according to participants. Demand from the domestic crushers also remains strong, with the USDA reporting the weekly crush above trade guesses at 141.6 million bushels.
The move back above US$14.00 per bushel in the most active May contract uncovered some additional speculative buying interest, which added to the firmer tone.
However, large South American supplies continue to overhang the market, while the ongoing uncertainty over possible Chinese cancellations also tempered the gains.
SOYOIL futures were stronger on Tuesday, taking some direction from the gains in soybeans. However, overnight declines in Malaysian palm oil did serve to limit the advances.
CORN futures in Chicago were up five to seven cents per bushel, with good export demand and uncertainty over Black Sea grain movement providing support.
Weekly US corn export inspections, of 976,742 tonnes, were up 4.3% from the previous week, while South Korea also reportedly bought US corn overnight.
However, corn did run into some technical resistance to the upside, with farmer selling also said to be picking up as the nearby May contract nears the psychological US$5.00 per bushel mark.
WHEAT futures in Chicago settled 15 to 18 cents per bushel higher on Tuesday, with deteriorating US crop conditions providing the catalyst for the move.
The USDA’s weekly crop report showed crop conditions for winter wheat were declining in Kansas, Oklahoma, and Texas. The dry weather was leading to concerns over emergence.
Uncertainty over the situation in Ukraine, and its possible impact on the global grain market, remained at the forefront of the wheat futures as well. Ukraine and Russia are both major players in the world wheat market, and any disruptions to grain movement there would open the door for more US wheat exports.
Up to 20% of the crop area in Ukraine could be left unseeded this spring due to financing issues, according to reports from the country.
• A study from the University of Leeds claims global warming will lead to declining crop yields by the year 2030. In addition to droughts, frequent storms and other environmental factors are expected to cause problems for farmers going forward.
• UCAB reported Monday that Ukraine could lose 11 million tonnes of grain in 2014, due to a decline in planted area. The analyst group said 20% of the arable land in the country might not be seeded due to financing problems.
