By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Dec. 9 (MarketsFarm) – The ICE Futures canola market was stronger on Wednesday, recovering from overnight declines as gains in the Chicago Board of Trade soy complex provided spillover support.
Flash fund selling sent the nearby January contract sharply lower in overnight trade, but that selling proved short-lived and the overall technical trend remains pointed higher.
Solid end user demand, from both exporters and domestic crushers, contributed to the eventual gains as the market works to ration some of that demand going forward.
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Relatively mild temperatures across the Prairies have seen farmers make steady deliveries in recent weeks, but forecasts calling for colder weather should temper the country movement.
About 48,172 canola contracts traded on Wednesday, which compares with Tuesday when 56,184 contracts changed hands. Spreading accounted for 40,588 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday, seeing a correction after yesterday’s declines. The United States Department of Agriculture releases its monthly supply/demand report on Thursday, and speculative short-covering ahead of the data was a feature.
Investors generally expect to see tightening stocks in the December report, although a repeat of the fireworks seen in November when prices rallied sharply in response to the report is thought to be unlikely.
Uncertainty over weather conditions in South America kept some caution in the market. While recent rains have helped ease some of the dryness concerns in the soybean growing regions of Brazil and Argentina, more moisture will be needed going forward.
CORN futures were also up with positioning ahead of tomorrow’s report.
Solid export demand contributed to the gains, with the USDA reporting private sales of 257,000 tonnes of corn to Mexico this morning.
WHEAT futures were up sharply on Wednesday, as the market was due for a correction after hitting two month lows earlier this week.
However, ample world wheat supplies kept a lid on the upside in wheat, with general expectations calling for an upward revision to world wheat stocks in this week’s USDA report.
