By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, May 18 (CNS Canada) – ICE Futures Canada canola contracts posted solid gains on Wednesday, despite losses in the Chicago soy complex, as speculative buying provided support.
Ideas that canola was looking underpriced compared to soybeans, after lagging soybeans to the upside on Tuesday, contributed to the firmer tone, according to participants.
Weakness in the Canadian dollar, which was down by half a cent relative to its US counterpart, was also supportive. A lack of significant farmer selling, as producers remain busy with spring seeding, underpinned the futures as well, according to traders.
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However, CBOT soybeans and soyoil futures were down today, which put some pressure on canola.
Forecasts calling for beneficial rainfall across most of the dry areas of Alberta over the next week were also bearish.
About 23,566 canola contracts were traded on Wednesday, which compares with Tuesday when 14,932 contracts changed hands. Spreading accounted for about 8,154 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed three to ten cents per bushel weaker on Wednesday, pressured by investor profit-taking.
Spillover losses from the nearby soyoil market was another bearish element.
The expectation that some US farmers will switch corn acres to soybeans due to wet conditions further pressured prices.
However fund-activity was a bullish feature in the market on Wednesday, which limited losses.
SOYOIL prices closed weaker on Wednesday, tracking losses in Malaysian palm oil.
SOYMEAL closed mixed on Wednesday.
CORN futures closed one to two cents per bushel stronger on Wednesday, supported by investor short-covering.
The expectation for reduced acres in favour of soybeans further advanced prices.
Increased producer-selling, due to higher prices, limited gains on Wednesday.
WHEAT closed one cent per bushel stronger to two cents per bushel weaker on Wednesday, as Ukraine and Russia have seen favourable growing conditions, which weighed on front contracts.
Investor short-covering limited losses and brought support to far contracts.
– Jordan has once more tendered to purchase 100 thousand metric tonnes of optional origin hard wheat, analysts say. The country has had a hard time finding a supplier due to quality and payment regulations.
– German farmers are expected to have planted less wheat than previously forecasted, market watchers say.
