By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, March 16 – THE ICE Futures Canada canola market posted gains Wednesday as chart-based buying combined with a lack of selling to elevate prices.
Malaysian palm oil, crude oil and Chicago Board of Trade soyoil and soybeans were higher which boosted values.
Slow farmer selling was supportive and crush margins improved.
Close scrutiny is already being paid to dry parts of Western Canada.
“The open interest continues to go down which tells me the funds are liquidating some of their short positions,” the trader explained.
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However, the Canadian dollar was up by a cent relative to its US counterpart late in the day which made canola less attractive to foreign buyers.
The looming South American soybean crop cast a bearish tone over the market.
European rapeseed futures were lower which weighed on values.
Demand is somewhat uncertain due to new rules over Chinese dockage allowances.
Around 19,749 canola contracts were traded on Wednesday, which compares with Tuesday when around 20,392 contracts changed hands. Spreading accounted for about 7,056 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 were up by one to two cents per bushel on Wednesday, recovering from earlier declines as speculative short-covering provided some support.
News that the US had made a fresh sale of 100,000 tonnes of soybeans to ‘unknown destinations’ for delivery during the current crop year, was supportive.
Farmers in Brazil are reportedly making good progress bringing in this year’s possibly record large soybean harvest.
Gains in crude oil and weakness in the US dollar index were also supportive.
SOYOIL settled with small gains on Wednesday.
SOYMEAL futures were lower on Wednesday, as adjustments to the soyoil/soymeal spreads weighed on values.
CORN futures in Chicago were steady to down 1 cent per bushel on Wednesday, with improving US weather forecasts behind some of the weakness.
Forecasts are calling for drier conditions across the southern US corn growing regions over the next few weeks, which should allow farmers to make good seeding progress.
Gains in crude oil did provide some support on the other side, helping keep corn rangebound overall.
WHEAT futures in Chicago were down by five to six cents per bushel on Wednesday, with improving US winter wheat conditions behind some of the weakness.
Large world supplies and poor demand for US wheat continued to weigh on values as well.
– US soft red winter wheat production is forecast to rise by 1% in 2016, while soft white winter wheat should increase by 19%, according to a survey of members of the North American Millers’ Association. That would put soft red winter wheat at 362 million bushels, and soft white winter wheat at 200 million bushels.
– The United Kingdom exported over 300,000 tonnes of wheat in January, with total exports during the crop year to date hitting 1.3 million tonnes.
