By Terryn Shiells, Commodity News Service Canada
Winnipeg, Mar. 4 – ICE Futures Canada canola contracts moved significantly higher, following the sharp advances seen in Chicago soyoil futures on Tuesday. Gains in Chicago soybeans were also supportive.
The downswing in the value of the Canadian dollar also underpinned canola, as it helped crush margins improve.
Continued ideas that canola is undervalued compared to other oilseeds added to the bullish tone, as did some chart-based buying.
Further support came from ongoing concerns about political problems in Ukraine and Russia, as they may result in increased export demand for North American grains.
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However, logistics problems in Western Canada, and the resulting slow usage of canola supplies this year, continued to overhang the market.
Profit taking and farmer selling at the highs of the day also capped the gains.
About 27,755 canola contracts were traded on Tuesday, which compares with Monday when 19,825 contracts changed hands.
Spreading accounted for 18,228 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted wheat prices after the close.
SOYBEAN futures closed nine to 15 cents a bushel higher on Tuesday, as short covering following recent losses and ongoing concerns about tight US supplies were bullish. Further support came from no signs of Chinese cancellations of US soybeans.
Worries about political problems in Ukraine possibly shifting some demand to North America for grains also lifted prices.
However, reports that Brazil’s soybean harvest is further along than at the same point last year, and ahead of the average pace, limited the gains, as did overbought price sentiment.
SAFRAS, a Brazilian firm, estimated that 41 per cent of Brazil’s soybeans have been harvested, above the average pace of 29 per cent for this time of year.
SOYOIL futures were 127 to 135 points higher, lifted by strong demand and concerns about political problems in the Black Sea region, brokers said.
SOYMEAL futures closed US$2.50 lower to US$0.50 higher, consolidating following Monday’s sharp declines. Spillover support came from the gains seen in soybeans, analysts said.
CORN futures were seven to 14 cents a bushel stronger on Tuesday, as ideas that Ukraine’s political problems may shift some demand for corn to the US lifted prices.
Strong export, domestic ethanol and feed sector demand were also behind some of the gains seen in corn futures.
However, a pick up in farmer selling following recent gains, as well as the large US corn supply situation, helped to limit the advances.
WHEAT futures in the US were mostly stronger, as Minneapolis, Kansas City and Chicago futures finished two cents lower to 13 cents US per bushel higher.
Wheat futures were underpinned by worries about political problems in the Black Sea region, as US wheat may pick up some demand from the area.
Reports that the US hard red winter wheat crop’s condition declined last week also helped to fuel some of the advances.
However, profit taking and farmer selling following yesterday’s sharp advances helped to temper the gains, traders said.
• The USDA said Hard Red Winter wheat conditions in Kansas were 34 per cent good to excellent last month, down from 35 per cent the month before. Crops in Oklahoma and Nebraska also declined in condition by one to three per cent.
• Egypt has enough wheat stocks to last until June, as they have imported 4.5 million tonnes since July, the country’s supply minister said.
• Australian wheat production for 2014/15 is estimated at 24.795 million tonnes, from 27.013 million last year due to lower yields, ABARES said.
