By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Jan. 13 – ICE Futures Canada canola contracts were stronger on Wednesday, as the Canadian dollar fell to fresh 13-year lows and CBOT soyoil moved higher.
After an early attempt at correcting higher, the Canadian dollar resumed its current downtrend to move well below the 70 US cent mark. The ongoing weakness in the currency makes exports more attractive to international buyers and also helps prop up domestic crush margins.
Follow through buying interest from Tuesday’s rally helped underpin canola, with the nearby technical signals shifting higher, according to participants.
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However, increased farmer selling on the other side did temper the upside potential, as producer sales were said to be picking up with the start of the new calendar year.
Improving South American crop prospects were also overhanging the oilseeds in general.
About 14,183 canola contracts were traded on Wednesday, which compares with Tuesday when 21,812 contracts changed hands. Spreading accounted for about 7,276 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed two-and-a-half cents per bushel to eight cents per bushel higher on Wednesday, still gathering support from a United States Department of Agriculture (USDA) report.
The USDA’s production estimates came in lower than analysts expected at 3.93 billion bushels.
Projections for lower soybean stocks also propped up the market on Wednesday.
Increased demand for US soybeans from China added to the bullish tone.
SOYOIL prices settled higher on Wednesday, tracking Malaysian palm oil.
SOYMEAL closed mixed on Wednesday, following nearby grain markets.
CORN futures closed mostly unchanged to one cent per bushel higher on Wednesday, still gathering support from USDA data.
The USDA’s world ending stocks report was bullish for corn, as it reflected lower supplies, and came in below analyst expectations.
However, favourable weather in South America limited gains.
WHEAT closed three to five cents per bushel weaker on Wednesday, pressured by high domestic stocks.
Weak demand for the commodity also weighed on prices.
Market watchers say the market has run out of steam after sharp gains on Tuesday.
Wheat is trending sideways-to-lower short-term, analysts say.
– South Korea bought 80,600 tonnes of Australian wheat, market watchers say.
– Tunisia has put out a tender for 92,000 tonnes of soft milling wheat for delivery in March/April.
