By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, February 17 – THE ICE Futures Canada canola market finished lower Wednesday, weighed down by strength in the Canadian dollar.
The Canadian dollar was nearly a cent higher relative to its US counterpart, which made canola less attractive to out-of-country buyers.
“Canola is going to have a tough time rallying because of the strong Canadian dollar,” noted a Winnipeg-based analyst.
The South American soybean harvest is underway and supplies will be hitting the market reasonably soon, which was bearish.
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However, rain in Brazil is expected to delay the soybean harvest somewhat.
Strength in Malaysian palm oil prices limited the losses.
Gains in crude oil, soyoil and soybeans also provided support to canola.
Milling wheat, durum and barley were all untraded and unchanged.
Around 36,139 canola contracts were traded on Wednesday, which compares with Tuesday when around 30,482 contracts changed hands. Spreading accounted for about 26,358 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were up by two to six cents per bushel on Wednesday, as advances in crude oil provided some support.
Equity markets were also up today, which brought in more speculative money to the commodity sector as well.
Concerns over possible rain-delays for the Brazilian harvest contributed to the gains, although the ongoing expectations for large supplies out of South America, when the harvest eventually moves forward, did limit the upside.
SOYOIL settled higher on Wednesday, as a rally in crude oil pulled the vegetable oil market up as well.
SOYMEAL futures were lower on Wednesday, with adjustments to the soyoil/soymeal spread behind some of the activity.
CORN futures in Chicago settled two to four cents per bushel higher on Wednesday, with the rally in crude oil behind some of the strength given the grain’s connection to ethanol production.
Weakness in the US dollar was also supportive, as it should encourage more export demand.
WHEAT futures in Chicago were up by four to seven cents per bushel on Wednesday, as the market continued to see a short-covering correction off of nearby lows.
Weakness in the US dollar index contributed to the gains, as the softer currency should make US wheat more attractive to international buyers.
However, ample world wheat supplies did remain a bearish influence in the background.
– Egypt has rejected a Canadian wheat shipment citing ergot contamination. The rejection came despite ergot levels in the shipment coming in well below the 0.05 per cent global tolerance standard, according to reports.
– Iran’s agriculture ministry is forecasting a large wheat crop in the upcoming season, and expects the country to be self-sufficient without needing to import.
