By Phil Franz-Warkentin, Commodity News Service
Winnipeg, Jan. 5 – ICE Futures Canada canola contracts were stronger on Tuesday, seeing a modest corrective bounce off of nearby support.
Chart based speculative buying was a feature, as support held to the downside and traders bought back some previously sold positions, according to participants.
Solid exporter and domestic crusher demand remained supportive as well, with the continued weakness in the Canadian dollar helping keep crush margins underpinned. The currency was down by roughly a quarter of a cent relative to its US counterpart.
Read Also
ICE canola mostly weaker in choppy midday trade
Glacier FarmMedia — The ICE Futures canola market was mostly lower at midday Monday in choppy activity. Losses in Chicago…
Gains in CBOT soybeans provided some spillover support as well. However, soyoil was down in the US, which did put some pressure on canola. Ideas that farmers are still holding onto large unpriced supplies in Western Canada also helped keep gains in check.
About 18,488 canola contracts were traded on Tuesday, which compares with Monday when 14,986 contracts changed hands. Spreading accounted for about 12,072 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded.
SOYBEAN futures at the Chicago Board of Trade were up by one to three cents per bushel on Tuesday, as speculative short-covering came forward to help the market see a correction following Monday’s sharp declines.
Solid export demand for US beans provided further support, with weekly inspections coming in at the high end of trade guesses.
However, forecasts for improving weather conditions in South America did temper the gains. Concerns over Chinese demand going forward also limited the advances.
Expectations that next week’s USDA quarterly stocks report will show large US supplies kept a lid on the gains as well.
SOYOIL settled lower on Tuesday, with continued global economic uncertainty and spreading against soymeal behind some of the selling pressure.
SOYMEAL futures were up on Tuesday, following soybeans.
CORN futures in Chicago were steady to up by just over one cent on Tuesday.
Speculative short covering was a feature in corn, with the latest Commitment of Traders report showing that the managed money net short position was very large.
However, any advances were tempered by a lack of significant end-user demand from exporters or the domestic ethanol sector.
WHEAT futures in Chicago were up by one to three cents per bushel on Tuesday.
Wheat was generally due for a corrective short covering bounce, after hitting fresh contract lows yesterday.
However, the generally bearish fundamentals limited the upside as improving US crop conditions and poor export demand putting some pressure on values.
