By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
The ICE Futures Canada canola market finished stronger after a surprising announcement by the Bank of Canada sent the Canadian dollar into a free-fall which pushed canola values higher.
The central bank slashed Canada’s key interest rate by a quarter-percentage-point despite widespread expectations the bank would leave the rate alone. The Canadian dollar dipped nearly two cents on the news, pushing it under 81 U.S. cents.
Commercial interest was steady on the day while forecasts calling for hot and dry weather in the northern portions of Brazil and Argentina’s soybean crop were supportive for values.
Read Also
ICE canola eases off
Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange showed small losses on Monday morning to go with…
However, the vegetable oil market was under pressure this morning with Malaysian palm oil and soyoil both lower.
Overbought sentiment and profit-taking at the highs tempered the upside. Farmer hedges also came forward to weigh on values.
Around 36,881 canola contracts were traded on Wednesday, which compares with Tuesday when around 36,012 contracts changed hands. Spreading accounted for 28,408 of the contracts traded.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down two cents to up two cents per bushel on Wednesday, after bouncing around both sides of unchanged in choppy activity.
End user and speculative bargain hunting accounted for some of the buying interest during the session, as the market saw some consolidation following the three-month lows hit on Tuesday.
Concerns over dry weather in parts of South America were also somewhat supportive.
However, conditions in Brazil and Argentina remain favourable overall. Brazil’s Celeres pegged the country’s soybean crop at a record 92.4 million tonnes today, which would be up by 3% from an earlier estimate.
SOYOIL futures were down on Wednesday, as losses in Malaysian palm oil weighed on values.
SOYMEAL futures were up on Wednesday, with solid export demand behind some of the strength. Spreading against soyoil was also supportive.
CORN futures in Chicago were down one to two cents per bushel on Wednesday, as signs that demand is backing away from both exporters and the ethanol sector weighed on prices.
The generally favourable South American production prospects also weighed on corn, according to participants.
On the other side, a continued lack of significant farmer selling was supportive for corn.
WHEAT futures in Chicago settled within a penny of unchanged, lacking any clear direction.
Speculative short-covering and renewed concerns over the unrest in Ukraine provided some underlying support for wheat, according to participants.
A weaker US dollar was also supportive, as it makes US wheat more attractive to internationally buyers.
On the other side, favourable weather conditions for the US winter wheat crop did put some pressure on values. Large global supplies also continue to overhang the market.
– Bangladesh is tendering to purchase 50,000 tonnes of milling wheat, according to reports.
– China sold 81,000 tonnes of US wheat from its state reserves.
