By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, October 19 – THE ICE Futures Canada canola market posted gains on Wednesday as weather concerns, technical support and stronger vegetable oil all propped up prices.
Both front-month contracts broke through resistance at C$500 per tonne, on concerns that cold, wet weather would keep a lot of canola from being harvested in Western Canada.
For the first time this month, the January contract exceeded the November contract in volume as traders shifted positions.
“It looks like the January wanted to be the lead month,” noted a trader.
Read Also
Canadian Financial Close: C$ softens Tuesday
Glacier FarmMedia — The Canadian dollar was slightly weaker on Monday, as the latest inflation data The Canadian dollar settled…
Advances in Chicago Board of Trade soybeans and Malaysian palm oil were also supportive for canola.
The Canadian dollar was lower relative to its US counterpart, which made canola more enticing on the international stage.
However, forecasts calling for favourable weather over the next few days dragged on values.
Soybean yields in the US are excellent and all signs point towards a massive crop, which was bearish for canola.
Around 38,787 canola contracts were traded on Wednesday, which compares with Tuesday when around 38,421 contracts changed hands. Spreading accounted for about 31,508 of the contracts traded.
Milling wheat, barley and durum were untraded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade were up seven to nine cents per bushel on Wednesday, as solid export demand and gains in crude oil provided support.
The USDA reported a sale of 185,000 tonnes to unknown destinations, which came on the heels of very strong weekly export inspections reported on Monday.
In addition, tighter than expected US crude oil inventories sent oil to its highest levels in 15 months, which spilled into other commodity markets.
A move above nearby technical resistance was another supportive influence, although profit-taking did come forward at the highs.
US farmers continue to make good progress bringing in this year’s US soybean crop and the large production prospects tempered the gains.
SOYOIL futures were up on Wednesday, taking some direction from crude oil.
SOYMEAL futures were up on Wednesday.
CORN futures in Chicago were up by two to four cents per bushel on Wednesday, also finding some support from the rally in crude oil.
However, the advancing US corn harvest tempered the gains. US corn harvest is thought to be about half finished, and farmers are active sellers as supplies build in the countryside.
WHEAT futures in Chicago were steady to up one cent per bushel on Wednesday, as speculative short-covering on the one side continued to be countered by the ample world supply situation.
The gains in soybeans and corn provided some spillover support.
– Rains in Brazil have hurt the quality of the country’s wheat crop, with Argentina now expected to be in line to export 4 million tonnes of wheat to its South American counterpart, according to separate reports.
– Egypt is sitting on five-month’s worth of wheat reserves and is looking to grow those stocks so that they would last six months, through the allocation of US$1.6 billion additional funds.
