By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
January 14, 2015
Winnipeg – ICE Futures Canada canola contracts were mixed on Wednesday, with gains in the most active front months and a softer tone in the more deferred positions.
Fund traders were noted buyers, adding to their net long positions of roughly 30,000 contracts, according to participants.
Steady end user demand and a lack of significant farmer selling remained supportive as well. However, widening basis levels were seen as a sign that the commercial demand was backing away.
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The large US soybean supply situation and relatively favourable South American growing conditions also served to put some pressure on canola.
About 27,138 canola contracts were traded on Wednesday, which compares with Tuesday when 20,820 contracts changed hands. Spreading was a feature, accounting for 20,358 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures ended four to five cents US per bushel higher Wednesday, staging a late-day rally after trading lower earlier in the session.
Sentiment that recent losses were overdone, and the market was due for an upward correction, helped to lift prices, analysts said.
Continued strong demand for the US soybean crop was also underpinning the market. The USDA said new export sales totalling 202,750 tonnes were made for delivery in 2014/15, and 2015/16. The destinations are unknown.
However, generally favourable conditions for South American soybeans ahead of harvest tempered the advances, as did expectations that US soybean acreage will increase this spring.
SOYOIL futures were stronger on Wednesday, with ongoing worries about reduced Malaysian palm oil production behind the gains, traders said.
SOYMEAL futures were up slightly, taking some direction from the gains seen in soybeans.
CORN futures in Chicago finished weaker, seeing some follow-through selling on Tuesday’s sell-off. Values ended three to five cents US per bushel softer.
The liquidation of long positions by the funds added to the bearish tone, as did signs of slowing demand from the domestic ethanol industry.
However, expectations that US farmers will reduce their corn acreage this spring were limiting the downside, market watchers said.
WHEAT futures in the US ended 8 to 12 cents US per bushel lower on Wednesday, marking the third straight day of large losses.
Improving weather for the US winter wheat crop this week was behind the losses, as was ongoing strength in the US dollar index. The stronger US currency makes US wheat more expensive to foreign buyers.
However, some support came from rumours that Ukraine is considering asking traders to limit milling wheat exports out of the country, participants said.
• France is expected to export 8.8 million tonnes of wheat to destinations outside of the European Union, according to FranceAgriMer’s latest estimate.
• India could take some business away from Russia when they impose their export restrictions starting February 1. Reports say India could export up to two million tonnes of wheat between February and July to Asian buyers.
Settlement prices are in Canadian dollars per metric ton.
