By Phil Franz-Warkentin and Jade Markus, Commodity News Service
Winnipeg, April 6 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Wednesday, hitting their highest levels in two months as gains in CBOT soybeans and soyoil provided some spillover support.
Canola was also underpinned by solid end user demand from both exporters and domestic crushers, according to participants. Chart based buying was another feature, as canola tested nearby resistance.
However, the Canadian dollar was also firmer, which tempered the upside potential to some extent. Scale-up farmer selling also weighed on values.
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About 19,954 canola contracts were traded on Wednesday, which compares with Tuesday when 24,261 contracts changed hands. Spreading accounted for about 14,372 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded, although prices were revised after the close.
SOYBEAN futures at the Chicago Board of Trade closed two to three cents per bushel stronger on Wednesday, supported by losses in the US dollar and gains in crude oil.
A weaker US dollar makes the country’s commodities more affordable to foreign buyers, which is bullish.
Advances in crude oil provided spillover support to soybeans, as the commodity is an ingredient in biodiesel.
Argentina’s soybean harvest has been halted by rain, which is also bullish.
SOYOIL prices settled stronger on Wednesday.
SOYMEAL closed lower on Wednesday, tracking nearby grain markets.
CORN futures closed mostly unchanged on Wednesday, propped up by strong foreign demand as Brazil’s first crop is now out of the market, analysts say.
Traders expect fewer acres of corn will be planted this year than the United States Department of Agriculture (USDA) had previously reported, as weather has been favouring soybeans, which further supported prices.
Declines in the US dollar added to the gains.
But spillover weakness from the nearby wheat market put a lid on advances on Wednesday.
WHEAT closed ten to 11 cents per bushel weaker on Wednesday, pressured by crop condition ratings from the USDA.
Winter wheat in the US is healthier than expected, with 34 per cent of plants in fair condition, 49 in good condition, and ten per cent in excellent condition, according to USDA data for the week ended April 3.
Dry regions of the Great Plains are expected to get rain next week, which is bearish as it will help with crop development.
Limited demand added to the declines on Wednesday, analysts say.
– Egypt has banned domestic trading of imported wheat, according to reports on Wednesday.
– Japan has tendered for 137,486 tonnes of US, Canadian, and Australian wheat, market watchers say.
