By Phil Franz-Warkentin, Commodity News Service Canada
December 11, 2014
Winnipeg – ICE Futures Canada canola contracts were higher on Thursday, testing resistance to the upside as a number of factors came forward to provide support.
Gains in the CBOT soy complex accounted for some spillover buying in canola, while chart signals were also pointing higher, according to participants. The weaker Canadian dollar was another supportive factor for the Winnipeg futures. The currency was trading below 87 US cents, its weakest level in five years, which should help boost crush margins and also make the crop more attractive to export customers pricing in US dollars.
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On the other side, while most farmers appear content to wait on the sidelines until the New Year, light scale up farmer selling did slow the upward move, said traders.
The relatively favourable South American crop prospects, large US soybean stocks, and continued weakness in crude oil also put some pressure on canola values.
About 37,412 canola contracts were traded on Thursday, which compares with Wednesday when 38,698 contracts changed hands. The January/March spread was a feature, especially as the inverse widened to over six dollars at one point during the session, said a broker.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were up by 8 to 10 cents per bushel on Thursday, seeing a bit of a corrective bounce following Wednesday’s declines.
While soybeans had posted large declines following Wednesday’s USDA supply/demand report, the actual numbers were somewhat supportive as far as beans were concerned. As a result, the tightening supply projections helped the market take back some of those losses, according to traders.
A firmer tone in the outside financial markets also lent some spillover support to soybeans.
However, soybeans closed well off their session highs, as poor weekly export data was overhanging the market. US weekly export sales of just over 800,000 tonnes were down 30% from the previous week, and were taken as a sign that international demand was starting to shift to South America.
Good weather conditions for soybeans in Brazil and Argentina were also bearish for the US market.
SOYOIL and SOYMEAL futures were both higher on Thursday.
CORN futures in Chicago were up by 3 to 8 cents per bushel on Thursday, as chart-based buying and solid export demand provided support.
Weekly US corn exports were pegged at 962,800 tonnes by the USDA, which was at the high end of trade guesses. Solid demand from the ethanol sector was also underpinning the corn market.
WHEAT futures in Chicago were up by 13 to 17 cents per bushel, boosted by improving export demand and speculative short-covering.
Weekly US wheat export sales of 526,500 tonnes came in above trade guesses and helped give the market a bit of a boost.
However, rising world supply prospects, and improving weather for the US winter wheat crop did limit the advances.
Settlement prices are in Canadian dollars per metric ton.
