By Jade Markus, Commodity News Service Canada
WINNIPEG, June 1 – ICE Canada canola contracts were stronger on Wednesday, supported by gains in Chicago Board of Trade soybeans and soy oil.
“That soy market strength is pulling it up today, but somewhat reluctantly,” said one Winnipeg-based trader.
Soybean markets gained with the expectation that demand from South America will increase going forward, as both Brazil and Argentina have seen crop loss due to unfavourable weather.
Gains in Chicago Board of Trade soy oil also added to canola’s advances.
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The trader added that strength in CBOT soy markets is somewhat unexpected, especially following United States Department of Agriculture data, which shows soybean seeding is ahead of last year’s pace.
“I don’t think traders want to pursue these markets to the upside to any great degree,” he said.
Market watchers say canola supplies are likely to be tight going forward, which further supported prices.
Malaysian palm oil closed lower overnight, which limited gains on Wednesday.
The trader added that the market may not have much more upside potential, especially as dryness concerns have eased.
“North American crops are looking very good,” he said.
About 12,612 contracts had traded as of 10:25 CDT.
Milling wheat, durum and barley futures were all untraded and
Prices in Canadian dollars per metric tonne at 10:25 CDT:
