By Dave Sims and Jade Markus, Commodity News Service Canada
Winnipeg, February 5 – THE ICE Futures Canada canola market posted modest gains after a choppy trading session Friday. Values traded both sides of unchanged numerous times before ending stronger due to action within the Canadian dollar and chart-based trading.
The most-active March contract dropped as low as C$465 per tonne, which was right above chart support, before buying was uncovered at the lows to take it above unchanged.
The Canadian dollar was down roughly two thirds of a cent relative to its US counterpart, which made canola more attractive to out-of-country buyers.
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Malaysian palm oil futures hit their highest point in 20 months which supported canola.
Certain parts of Brazil and Argentina are too dry right now which is hurting soybean crops down there, but bullish for the canola market.
On the other side, losses in Chicago soybeans and European rapeseed futures limited the gains.
Large world supplies of soybeans dragged on values and the technical bias lies to the downside.
Around 38,876 canola contracts were traded on Friday, which compares with Thursday when around 28,046 contracts changed hands. Spreading accounted for about 29,320 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade closed four to seven cents per bushel lower, pressured by strength in the US dollar.
A firmer US dollar makes the country’s commodities less appealing to international buyers, which is bearish.
The expectation that the United States Department of Agriculture (USDA) will raise domestic inventory estimates also pressured prices on Friday.
Favourable weather forecasted for competing growing region, Argentina, added to the bearish tone on Friday.
SOYOIL prices settled mixed on Friday, as soybeans caused spillover pressure, while gains in Malaysian palm oil limited losses.
SOYMEAL closed weaker on Friday, tracking nearby grain and oilseed markets.
CORN futures closed two to three cents per bushel weaker on Friday, pressured by the nearby wheat contract.
Traders also added bearish bets, as many expect the USDA to increase domestic corn stock forecasts, which further pressured price.
WHEAT closed about four to six cents per bushel lower on Friday, pushed lower by a stronger US dollar, especially as the USDA released weak export data on Thursday.
Wheat exports hit a marketing year low in the week ended January 28.
High global stockpiles of the commodity further pressured prices on Friday.
– Analysts say lower Canadian wheat stocks reported by Statistics Canada show the effect of a strong US dollar.
– Algeria bought 840 thousand metric tonnes of optional-origin milling wheat, according to reports.
