By Dave Sims and Jade Markus, Commodity News Service Canada
Winnipeg, May 25 – THE ICE Futures Canada canola market finished higher on Wednesday, pushed upward by steep gains in the US soy complex.
Strength in crude oil and Malaysian palm oil underpinned the market.
Slow farmer selling contributed to the upside as well, said a Winnipeg-based trader.
US farmers continue to switch out corn acres in favour of US soybeans which was bearish for canola.
There are ideas canola is somewhat expensive relative to other oilseeds.
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However, the Canadian dollar was higher relative to its US counterpart, which made canola less attractive to domestic crushers and foreign buyers.
Parts of Western Canada that were suffering from excess dryness received showers, which was bearish.
“Alberta got some rain over the weekend, now Manitoba is expected to get some showers,” noted the trader.
Around 17,334 canola contracts were traded on Wednesday, which compares with Tuesday when around 19,468 contracts changed hands. Spreading accounted for about 6,670 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade closed twelve to thirty cents per bushel higher on Wednesday, as wet weather in the US spurred another round of fund activity.
Rainy conditions in the US have slowed seeding progress, which is bullish.
The expectation for lower yields from Argentina, which has increased demand for US crop, added to soy’s advances.
Stronger crude oil prices, and gains in the nearby soymeal market, created spillover support for prices.
Soybeans are used in biodiesel, and higher crude prices increase the likelihood that processors will blend above mandated amounts.
SOYOIL prices closed stronger on Wednesday, tracking soybeans higher.
SOYMEAL closed higher on Wednesday, as market watchers say Argentina may face a shortage of the commodity.
CORN futures closed two to seven cents per bushel stronger on Wednesday, propped up by gains in crude oil.
Corn is an ingredient in ethanol.
Rain in eastern parts of the US further supported the market by slowing seeding progress.
Fund activity was also a feature in the corn market on Wednesday.
Anticipation for lower yields from Brazil added to the advances.
WHEAT closed two to three cents per bushel stronger on Wednesday, gathering spillover support from nearby grain and oilseed markets.
Crop conditions in parts of the US are too cold and wet, analysts say, which puts wheat at risk of disease.
Heavy global supplies limited gains on Wednesday, market watchers say.
– Jordan has bought 100,000 metric tonnes of hard wheat, market watchers say. The wheat is expected to be Romanian and delivered in October.
– Many eastern parts of the US aren’t expected to see much, if any, drier weather over the next ten days, analysts say.
