By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 5 (CNS Canada) – ICE Futures canola contracts were weaker on Tuesday, taking back most of Monday’s gains as confirmation of large supplies weighed on values.
Statistics Canada reported record high canola stocks in the country as of Dec. 31, at 14.5 million tonnes. The burdensome stocks were generally in line with market expectations given the slow export pace this year.
Early losses in Chicago Board of Trade soybeans added to the softer tone in canola.
However, soybeans managed to turn higher by the close. Gains in soyoil and weakness in the Canadian dollar were also supportive, with crush margins improving on the day.
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About 12,867 canola contracts traded on Tuesday, which compares with Monday when 14,791 contracts changed hands. Spreading accounted for 11,222 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade settled with small gains in the most active front months after trading to both sides of unchanged throughout the session.
The United States Department of Agriculture announced large sales of 2.6 million tonnes of soybeans to China this morning, but that business was anticipated and did little to move the market. An additional 274,000 tonnes were also sold to other unknown destinations.
The latest sales to China were tied to promises made following last week’s trade talks between China and the U.S., and more sales will be needed to cut into the large U.S. supplies.
The USDA will release its monthly supply/demand report on Friday, along with some data from January that was delayed due to the government shutdown. Uncertainty ahead of those reports had traders reluctant to push values too far one way or the other as they square positions.
CORN futures held onto small gains, with positioning ahead of Friday’s reports a feature.
Corn remains stuck in a sideways trading range, looking for some fresh news to push it one way or the other.
WHEAT futures were narrowly mixed on the day.
Canadian wheat stocks as of Dec. 31 came in at 23.2 million tonnes, which was in line with market expectations, and the year ago level.
U.S. wheat stocks data will be out on Friday, and general expectations are for bigger supplies on hand this year compared to a year ago.
Friday’s USDA reports will also include winter wheat acreage estimates, which could provide some direction for the futures.
