By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, June 7 (CNS Canada) – ICE Futures Canada canola contracts were higher at Tuesday’s close, recovering from early declines as soybeans turned higher at the Chicago Board of Trade.
Relatively favourable crop conditions across most of Western
Canada were a bearish influence in the background. However, there are still more than enough areas of concern to keep some weather premiums in the market, said traders.
Ideas that canola is looking underpriced relative to other oilseeds were also supportive, according to a broker.
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Losses in Chicago soyoil and gains in the Canadian dollar did limit the eventual gains, as that combination cuts into crush margins.
About 27,297 canola contracts were traded on Tuesday, which compares with Monday when 31,596 contracts changed hands. The July/November spread was a feature of the activity as participants rolled their positions out of the front month.
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 three to fourteen cents per bushel higher on Tuesday, supported by crop-loss in Argentina.
Flooding in Argentina is expected to increase demand for US soybeans, although it hasn’t been reflected in export data yet.
Soybean inspections were reported at 98 thousand metric tonnes last week, which is the smallest weekly amount this marketing year, analysts say.
Prices were also supported by dryness in some parts of the US, which could hurt crop development.
Losses in the US dollar further propped up the market, as a weaker greenback makes US commodities more appealing to international buyers.
SOYOIL prices closed weaker on Tuesday.
SOYMEAL closed mixed on Tuesday.
CORN futures were a quarter of a cent lower, to three cents higher on Tuesday, supported by gains in crude oil.
Stronger crude oil futures increase the likelihood that processors of ethanol, which is made from corn, will blend above mandated amounts.
Weakness in the US dollar further propped up prices.
However, traders are starting to position ahead of a United States Department of Agriculture monthly supply and demand report due out on Friday, which could cause declines in coming sessions.
WHEAT closed one to three cents per bushel stronger on Tuesday, as the pace of the US winter wheat harvest is behind the five-year-average.
Winter wheat is two per cent harvested, the five-year-average is ten per cent.
Rain and flooding in France, which puts the country’s wheat crops at risk, further propped up the market on Tuesday.
– US spring wheat is expected to be 79 per cent in good to excellent conditions, compared with 69 per cent last year.
– The Nigerian government has created a strategic wheat and rice task force, which—in part—will introduce production targets.
