By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 28 – THE ICE Futures Canada canola market chalked up gains on Tuesday, but the advances were much smaller than they could have been as traders took profits before the close.
Canola climbed after rumours of adjustments to US bio-fuel requirements sent US soybeans and soyoil futures surging.
“Funds were also doing some spring buying,” noted a trader in Winnipeg.
The Canadian dollar was about half a cent weaker compared to its US counterpart, which made canola more attractive to out-of-country buyers.
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However, farmer hedging also pressured prices.
Large soybean supplies coming out of South America weighed on the market.
Around 48,041 canola contracts were traded on Tuesday, which
compares with Monday when around 25,910 contracts changed hands. Spreading accounted for about 17,672 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade were up 10 to 14 cents per bushel on Tuesday, as rumoured changes to US renewable fuels policy gave the agriculture markets a boost.
The new US administration is said to be close to announcing changes to the point of obligation under the Renewable Fuel Standard, taking the onus of compliance from refiners to blenders farther down the supply chain. That change is also expected to come with expansions to the amount of higher-blended E15 ethanol allowed to be sold in the country, tax credits for biodiesel, and restrictions on biofuel imports.
Weather concerns in parts of Brazil, and reports of logistics issues moving recently harvested soybeans from the countryside to port positions, added to the firmer tone.
However, soybeans settled well off their highs for the day, with farmer hedges and speculative profit-taking weighing on values.
SOYOIL futures were up sharply on Tuesday, with expectations for increased demand from the biofuels sector providing support.
SOYMEAL futures were stronger on Tuesday, moving in sympathy with soybeans and soyoil.
CORN futures in Chicago were up by four to six cents per bushel on Tuesday, as the talk of increased demand for corn-based ethanol provided support.
However, just as in soybeans, profit-taking at the highs tempered the gains.
WHEAT futures in Chicago were up by four to six cents per bushel on Tuesday, taking some direction from the rally in soybeans and corn.
Chart-based speculative buying was a feature, as participants squared positions to end the month.
However, ample world supplies remained a bearish influence tempering the gains.
