By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
February 6, 2015
Winnipeg – ICE Futures Canada canola contracts were mixed at Friday’s close, although the bias was higher in the most active nearby months as light commercial and speculative buying interest provided support.
Modest chart based buying was a feature throughout the day, as canola tested the upper edge of its nearby trading range, according to participants. A weaker tone in the Canadian dollar, which was trading back below 80 US cents, provided some underlying support for canola as well.
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Recent strength in Malaysian palm oil was also supportive, although declines in CBOT soybeans did limit the upside potential in canola. Large South American soybean production prospects were also overhanging the oilseeds in general, said traders.
About 19,605 canola contracts were traded on Friday, which compares with Thursday when 14,890 contracts changed hands. Spreading accounted for 14,724 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures ended three to eight cents US per bushel softer on Friday, seeing some profit taking on Thursday’s gains.
Strength in the US dollar index and pressure from the advancing harvest of South America’s very large soybean crop were also bearish.
A lack of fresh demand news was also overhanging the market, analysts said.
However, continued strength in global vegetable oil values, after Thursday’s news that Indonesia will raise subsidies on biodiesel production, limited the losses.
SOYOIL futures were up slightly on Friday, with strength in outside oilseed markets and spreading against soymeal providing support, traders said.
SOYMEAL futures were weaker, following the losses seen in soybeans.
CORN futures in Chicago finished little changed, holding one cent lower to one cent US per bushel higher on Friday. Position squaring ahead of next Tuesday’s monthly USDA report kept values within a narrow range.
Downward pressure came from strength in the US dollar, as it made corn more expensive to foreign buyers. The large global supply situation also weighed on the market.
On the other side, expectations that US farmers will lower their corn acreage this spring was supportive, as was a rebound in crude oil and energy prices.
WHEAT futures in the US ended mixed. Chicago futures were one to three cents higher, while Minneapolis futures were two to four cents lower. Kansas City wheat futures ended two cents lower to a quarter of a cent higher.
Follow-through buying on Thursday’s gains was supportive overall.
Optimism that the US will win some recent tenders for wheat placed by multiple Middle Eastern countries earlier this week was also behind the gains.
Further support came from worries about warm weather causing some US winter wheat crops to come out of dormancy.
On the other side, the upswing in the value of the US dollar weighed on prices, as it made US wheat more expensive to international buyers. The large global supply situation was also bearish.
• Russia’s Agriculture Ministry says 21 per cent of the country’s winter grain crops are rated as being in poor condition.
• Euronext, an Exchange operator, will launch a new wheat futures contract in March in order to achieve higher quality standers for grain trading, reports say.
• European Union export licenses for 1.67 million metric tons of soft wheat were issued during the week ended February 3, the highest since July 2004, data from the EU showed.
Settlement prices are in Canadian dollars per metric ton.
