By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
December 3, 2014
Winnipeg – ICE Futures Canada canola contracts were down on Wednesday, with speculators liquidating long positions behind some of the selling pressure.
Bearish technical signals and the resulting fund selling were a feature in canola, as the nearby chart signals are pointing lower, according to an analyst.
A firmer tone in the Canadian dollar was another bearish factor overhanging the canola market.
Losses in CBOT soybeans for most of the day weighed on prices as well. However, soybeans managed to turn higher in the final minutes of the day, while soyoil posted gains throughout the session. The activity in soyoil helped crush margins improve, and the resulting domestic crusher demand was somewhat supportive.
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A continued lack of farmer selling, with producers generally thought to be content to wait on the sidelines until the New Year, provided some underlying support for canola as well, said traders.
Statistics Canada releases updated production estimates on Thursday, December 4, and positioning ahead of that report kept some caution in the Canadian market. Traders are generally anticipating an upward revision to the canola production number, from the 14.1 million tonnes forecasted in October, but the extent of that adjustment remains to be seen.
About 20,334 canola contracts were traded on Wednesday, which compares with Tuesday when 29,399 contracts changed hands. Spreading accounted for 14,932 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were one to two and a half cents US per bushel higher on Wednesday, after the market staged a late-day rally after trading lower for most of the session.
Ideas that losses were overdone caused traders to buy back some previously sold positions ahead of the close, analysts said.
Continued good demand from domestic crushers was also supportive, as crush margins remain positive.
However, good weather in South America, the large US crop and ideas that China’s buying will slow down soon were weighing on prices.
SOYOIL futures finished higher on Wednesday, with a recovery in crude oil values helping to underpin the market, brokers said.
SOYMEAL futures were weaker Wednesday, with spreading against soyoil a feature of the activity.
CORN futures in Chicago finished steady to two cents US per bushel higher Wednesday, finding some spillover support from the gains in soybeans, traders said.
Ideas that recent losses were overdone also sparked some supportive buying in the market.
However, continued lackluster export demand for the US commodity limited the gains, as did spillover pressure from the weakness in wheat.
Ongoing worries about falling oil prices reducing demand for corn in US ethanol markets were also bearish.
WHEAT futures in the US were weaker Wednesday, with Minneapolis, Chicago and Kansas City futures ending eight to 20 cents US per bushel lower. Profit taking on recent advances was behind the declines, analysts said.
Easing worries about wheat exports in Russia being disrupted by new regulations also weighed on values, as did ideas that global supplies remain large.
Strength in the US dollar index also contributed to the losses, though worries about cool weather damaging some winter wheat crops in the US, Ukraine and Russia remained supportive.
• Egypt’s GASC is looking to purchase at least 60,000 tonnes of wheat to be delivered between January 1 and 10, 2015, according to reports.
• The Sindh government in Pakistan is banning the transportation of wheat and flour from other provinces to crack down on wheat hoarders, reports say.
• Approximately 1.3 million tonnes of wheat were lost due to poor handling in Egypt this year, according to officials with the country’s Agricultural Research Centre.
Settlement prices are in Canadian dollars per metric ton.
