By Dave Sims and Phil Franz-Warkentin
The ICE Futures Canada canola market was stronger on choppy trading Friday – ultimately following US soybeans and soyoil higher to end the week.
“Interesting, choppy action to say the least,” remarked a trader, adding the Friday session saw two-sided commercial activity.
“Each day this thing creeps a little higher,” he noted.
The Canadian dollar was weaker against its US counterpart, which was supportive for values, as it made canola more attractive on the international market.
Read Also
North American grain/oilseed review: Canola falls Friday
ICE Futures canola market was weaker on Friday, settling at its weakest levels in two weeks. Speculative selling was a…
Strength in US corn also contributed to spillover support for canola, said the trader.
However, improved prospects for development of the soybean crop in South America were bearish.
Malaysian palm oil was weaker which limited the gains.
Around 30,912 canola contracts were traded on Friday, which compares with Thursday when around 37,412 contracts changed hands. Spreading accounted for 23,626 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
US Grain/Oilseed Review
SOYBEAN futures at the Chicago Board of Trade were up by 2 to 5 cents per bushel on Friday, as a rally in corn spilled over to provide some support.
The USDA reported a fresh export sale of 110,000 tonnes of US soybeans to unknown destinations this morning, which added to the firmer tone in soybeans, according to participants.
However, the large US supply situation, losses in soymeal, and favourable South American weather conditions were all bearish for soybeans.
SOYOIL futures were up on Friday, as adjustments in the soyoil/soymeal spread favoured the oil side of the equation.
SOYMEAL futures were down on Friday, seeing a profit-taking correction following recent gains.
CORN futures in Chicago were up by 6 to 9 cents per bushel on Friday, as speculative buying helped take values above nearby resistance.
The March contract climbed above the psychological US$4.00 per bushel level, hitting fresh five-month highs. Ideas that China may be easing its restrictions on imports of US corn and DDGS provided some further support.
On the other side, the large US corn crop and continued weakness in crude oil did limit the gains.
WHEAT futures in Chicago were up by 5 to 17 cents per bushel, hitting fresh six-month highs on the back of speculative fund buying and uncertainty over Russian exports. Minneapolis and Kansas City wheat prices were also up on the day.
Whether or not Russia will implement measures to slow exports has been a major question in the grain market over the past week, with the sentiment on Friday leaning to the side that would see a slowdown in Russian activity in the international market. Russia made a large sale to Egypt in that country’s latest tender, but Russia may now be looking at raising its own domestic prices in an attempt to slow future movement.
Relatively favourable conditions for the US winter wheat crop did temper the upside potential in the futures.
– Saudi Arabia will stop growing wheat by 2016 and rely completely on imports, said the country’s minister of agriculture. The move is being made to help conserve water in the desert country. The country grew over 2 million tonnes of wheat in 2008, but has been steadily decreasing that domestic production at a rate of 12.5% annually. Saudi Arabia is forecast to import roughly 3 million tonnes of wheat in 2014.
– Egypt bought 180,000 tonnes of wheat in its latest tender, primarily from Russia and France.
– Argentina’s wheat crop was estimated at 11.5 million tonnes by the Buenos Aires Grain Exchange, which is unchanged from a previous forecast.
