By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, March 6 – THE ICE Futures Canada canola market ended narrowly mixed on choppy trade Friday – as the lower Canadian dollar and weaker soyoil market cancelled each other out. A weaker Canadian dollar helps make canola more attractive on the international market, but the heavy losses in US soyoil offset those gains. Volumes were extremely light on the day.
The May contract continued to receive support from the psychologically important C$450 mark.
Soymeal was higher on the day which helped boost canola values.
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Commercials went out bargain-hunting today while some traders were looking to square their positions before the weekend.
However, US soybeans and Malaysian palm oil were lower which limited the gains.
The Brazilian soybean crop, which is expected to be record large, is moving onto the market, which undermined values.
Around 9,880 canola contracts were traded on Friday, which
compares with Thursday when around 22,076 contracts changed hands.
Spreading accounted for 5,600 of the contracts traded.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade were steady to down one cent per bushel on Friday, seeing some consolidation to end the week. While South American harvest pressure did weigh on prices for most of the day, any losses were tempered by bargain hunting at the lows.
Yield reports continue to beat expectations as Brazilian farmers move forward with this year’s harvest, while the trucker strike that delayed movement recently is becoming less and less of a concern.
The USDA releases its monthly supply/demand report on March 10, and positioning ahead of the data accounted for some of the activity in the market.
SOYOIL futures were down on Friday, with spreading against soymeal a feature. Losses in Malaysian palm oil and other vegetable oil markets also weighed on prices.
SOYMEAL futures settled with small gains on Friday, with spreading against soyoil behind some of the strength.
CORN futures in Chicago were down by three to five cents per bushel on Friday, with declines in crude oil behind some of the weakness.
Lower crude oil prices cut into the demand for corn-based ethanol.
News that Ukraine is making large grain sales into the international market was also bearish for corn, as US supplies remain more expensive globally.
WHEAT futures in Chicago were narrowly mixed on Friday, with small gains in the nearby May contract but losses in the more deferred positions. In the other wheat markets, Minneapolis futures were down 1 to 2 cents on the day, while Kansas City wheat was up by 2 to 5 cents.
After testing major support at the US$4.80 per bushel level in the May Chicago contract, some bargain hunting at the lows came forward to help the most active contract settle higher.
However, any upside was limited by the continued strength in the US dollar. The US dollar index was trading at its highest levels in over a decade, which makes US wheat less attractive to international buyers.
– Iranian buyers purchased 85,000 tonnes of wheat from European and Black Sea origins, in the country’s first wheat purchase in a number of weeks.
– The unseasonable rains causing problems for wheat crops in northern India are now forecast to continue for at least another week.
– Taiwan has tendered to purchase 84,000 tonnes of milling wheat from the US, with the tender closing on March 11.
