By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Feb. 23 (MarketsFarm) – The ICE Futures canola market was stronger on Tuesday, moving up the daily C$30 per tonne daily limit in the lightly traded nearby March contract.
Tight old crop supplies and the need to ration demand going forward remained the major fundamental supportive factor in canola, with gains in the Chicago Board of Trade soy complex due to weather concerns in South America providing additional support.
Speculators were noted participants, with the technical chart stops likely hit on the way up.
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However, ideas that canola was looking overbought put some pressure on values.
Uncertainty over the Chinese reaction to a move by the Canadian government to declare China’s treatment of its Muslim Uighur minority as a genocide kept some caution in the market as well. China is a major buyer of Canada’s canola, and has already restricted imports due to diplomatic tensions between the two countries.
About 37,950 canola contracts traded on Tuesday, which compares with Monday when 24,425 contracts changed hands. Spreading accounted for 11,472 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were up sharply on Tuesday, hitting their best levels in a month.
The slow pace of the Brazilian harvest accounted for much of the strength in soybeans, with more rain in the forecast likely to cause further delays.
Estimates out of the country peg the soybean harvest at only about 15 per cent complete, which would the slowest start to the harvest in ten years.
Soyoil posted the largest gains of the soy complex, hitting fresh highs in sympathy with Malaysian palm oil.
CORN futures were also stronger, but lagged soybeans to the upside.
Farmers in Brazil typically seed their major corn crop after they harvest soybeans, but the harvest delays for soybeans means that corn is also going in the ground later than normal.
The latest estimates have corn seeding in Brazil at about 21 per cent complete, which would be well off the 51 per cent planted at this time last year.
WHEAT futures narrowly mixed, as wheat traders continue to try and get a better sense of the damage caused by recent cold weather in both the United States Plains and the Black Sea region
Updated crop ratings showed the Kansas winter wheat crop at 40 per cent good to excellent. That was down three points from the previous week, but still up from the 35 per cent good to excellent rating at this time a year ago.
The continued strength in canola has led to ideas the oilseed may take some acres away from spring wheat in Canada and the northern U.S. this spring, helping underpin the Minneapolis futures.
