By Phil Franz-Warkentin, Commodity News Service Canada
December 23, 2014
Winnipeg – ICE Futures Canada canola contracts were
mostly lower at Tuesday’s close, as an early move higher ran out of
steam and profit-taking came forward to weigh on values.
Chart-based buying and solid end user demand had helped canola
test the upper limit of its nearby trading range in early activity.
However, speculators showed a reluctance to push values above
that resistance and moved back to the sell side to square positions
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participants.
Canadian markets will be closed Thursday and Friday for
Christmas and Boxing Day, and will close early on Wednesday. The
resulting lack of liquidity could lead to some more choppiness in the
futures.
Early advances in CBOT soybeans were supportive, but beans
finished well off their highs. The relatively favourable South
American crop prospects, large US soybean stocks, and firmer tone in
the Canadian dollar also put some pressure on canola.
About 22,858 canola contracts were traded on Tuesday, which
compares with Monday when 25,362 contracts changed hands. Spreading
accounted for 13,724 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade finished near
unchanged on Tuesday, retreating from earlier highs by the close as
profit-taking came forward to weigh on values.
Soybeans had seen some early strength, as solid export demand
and gains in outside vegetable oil markets provided support,
according to participants.
However, the market ran into some chart resistance to the upside,
and positioning ahead of the Christmas holiday eventually put some
pressure on values.
The favourable crop prospects in South America were another
bearish influence overhanging the soy market.
SOYOIL was up on Tuesday, as gains in crude oil and Malaysian
palm oil provided some support. Positioning against soymeal also
favoured the oil side of the equation today.
SOYMEAL futures were mixed on Tuesday.
CORN futures in Chicago held onto small gains of gains of one
to two cents on Tuesday, in range-bound pre-holiday positioning.
Steady demand and a lack of farmer for the time being were both
supportive. However, there are still large supplies in the country,
and deliveries are expected to pick up after the holidays.
WHEAT futures in Chicago were up by 7 to 10 cents per bushel,
as continued expectations that Russia would implement measures to
slow wheat exports provided support.
Any efforts by Russian to temper exports would conceivably boost
the demand for US wheat.
However, any gains were likely exaggerated by the thin
pre-holiday volumes. Ideas that US wheat is starting to look more
expensive in the global market, especially with the US dollar
continuing to strengthen, did limit the advances.
– Egypt, the world’s largest wheat importer, reportedly now has
enough wheat to last until late April. At that time, the country will
begin purchasing wheat from local farmers.
– World wheat yields are forecast to decrease by 6% for every one
degree Celsius increase in average temperatures, according to new
research published in the journal ‘Nature Climate Change.’
Settlement prices are in Canadian dollars per metric ton.
