By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, June 8 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Wednesday, with the new crop contracts hitting fresh highs as a rally in Chicago Board of Trade soybeans provided spillover support.
Fund traders were noted buyers, adding to their long positions, according to traders. Solid end user demand, a lack of significant farmer selling, production concerns with the European rapeseed crop, and the need to keep some weather premiums in the market added to the firmer tone in canola.
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However, nearby weather forecasts are relatively favourable for crop development across the Canadian Prairies, which tempered the advances.
Strength in the Canadian dollar also put some pressure on values, according to participants.
About 30,520 canola contracts were traded on Wednesday, which compares with Tuesday when 27,297 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.
SOYBEAN futures at the Chicago Board of Trade moved to their highest level in close to two years, gaining seven to 44 cents per bushel on Wednesday, supported by hot, dry conditions in the US.
Warm weather in key US growing regions puts crops at risk, which propped up prices.
Increased demand from China also underpinned the market, analysts say.
The United States Department of Agriculture announced a new sale of 180 thousand metric tonnes of soybeans for 2016-2017 on Tuesday.
SOYOIL prices closed stronger on Wednesday, following advances in the soybean market.
SOYMEAL closed higher on Wednesday, supported by gains in nearby grain and oilseed markets.
CORN futures moved one to six cents per bushel higher on Wednesday, gathering spill over support from the nearby soybean market.
Parts of Brazil are seeing frost, which could hurt the second corn crop, which further supported prices.
Traders expect increased demand for US corn, which added to the bullish tone.
WHEAT closed nine to ten cents per bushel stronger on Wednesday, propped up by investor short-covering.
Drought in India, which has reduced the country’s domestic output, will drive up imports and is bullish.
However, harvest pressure limited gains.
– Egypt has rejected two more cargoes of grain, citing fungus concerns, market watchers say.
– Wheat harvest has started in south-central Kansas, analysts say.
