By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Dec. 17 – ICE Futures Canada canola contracts moved lower at Thursday’s close, as a late attempt at a correction higher ran out of steam before the final bell.
Canola spent most of the session posting losses, as declines in CBOT soyoil spilled over to weigh on values. However, CBOT soybeans bounced higher in the final hour of the day, and canola briefly followed suit.
The Canadian dollar dropped to fresh multi year lows relative to its US counterpart, losing nearly a full cent, which makes exports more attractive to international buyers and also helps boost domestic crush margins.
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However, the large supplies in Western Canada and losses in CBOT soyoil served to keep the overall bias lower as end users were reluctant to chase the market higher.
About 27,468 canola contracts were traded on Thursday, which compares with Wednesday when 25,898 contracts changed hands.
Milling wheat, durum, and barley futures were all untraded, although wheat prices were revised higher after the close.
SOYBEAN futures at the Chicago Board of Trade closed thirteen-and-a-half to fifteen cents per bushel higher on Thursday as traders covered short positions to stop the market from falling for a third session.
Market watchers say dry conditions in northern Brazil, and too much wetness in southern regions pose a threat to soybean crops, which also provided support on Thursday.
Other analysts say those conditions do not pose an issue to crops, at least for the time being.
Soybeans fell earlier in the day as Argentina’s president devalued the peso in order to get more of the country’s domestic supplies into global markets.
A stronger US dollar also contributed to losses earlier in the day.
SOYOIL prices settled lower on Thursday, tracking Malaysian palm oil and further pressured by a stronger dollar.
SOYMEAL closed stronger on Thursday, following nearby grain and oilseed markets.
CORN futures closed four to six cents per bushel higher on Thursday as speculators covered short positions, and the weather in South America was bullish.
Market watchers say the pattern of dryness in the north, and wetness in the south has the potential to harm soybean production, especially as crops will start pollinating next month.
Analysts say corn is moving sideways short-term.
WHEAT closed steady to more than two-and-a-half-cents per bushel higher on Thursday on investor short-covering after the commodity fell to a one-week low earlier in the day.
Strength in the US dollar makes US grains less affordable, especially at a time when global supplies are so high.
The expectation of increased competition from Argentina also capped gains as the president devalues the currency to boost trade, and intends on removing the export tax.
– Weekly export sales for the week ended December 10 totalled 320,200 metric tonnes, according to the United States Department of Agriculture.
– The USDA said wheat’s primary destinations were Nigeria, Brazil, Israel, Taiwan, Colombia, and Japan.
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