By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, November 27 – THE ICE Futures Canada canola market ended mixed Friday, giving back earlier gains on a choppy trading session.
Canola initially corrected off yesterday’s lows in the early going, however the bulls exited the scene once the US markets closed early, dropping values near unchanged.
South America looks to have another massive crop of soybeans this year which cast a bearish tone over the near-term January contract. As well, many traders expect the next report from Statistics Canada to reveal a larger canola crop than previously reported.
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However, gains in the US soy complex and crude oil pushed the more deferred values higher.
The Canadian dollar was lower relative to its US counterpart, which made canola more attractive to foreign buyers.
Despite the up and down movement, one trader noted the overall picture was still relatively the same.
“We’re still stuck in a bit of a trading range,” he said.
The technical bias is leaning to the upside.
Around 17,428 canola contracts were traded on Friday, which compares with Thursday when around 7,257 contracts changed hands. US markets were closed on Thursday for American Thanksgiving. Spreading accounted for 12,008 of the contracts traded.
Milling wheat, barley and durum were untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were down by one to two cents per bushel on Friday, after chopping around within a narrow range throughout the holiday-shortened session.
The CBOT closed early on Friday, and many participants kept to the sidelines for an extended Thanksgiving holiday.
A firmer tone in the US dollar was seen as a bearish influence overhanging the market, as the stronger currency makes exports less attractive. Weekly US export sales, at over one million tonnes, were solid – but at the low end of trade estimates.
Relatively favourable South American crop prospects also weighed on prices.
SOYOIL settled with small losses on Friday, retreating from earlier gains as losses in crude oil and the firmer US dollar weighed on prices.
SOYMEAL futures were down on Friday, following soybeans.
CORN futures in Chicago were down by 4 to 6 cents per bushel on Friday, taking some direction from the losses in wheat.
Losses in crude oil also weighed on corn, given the grain’s connection to ethanol production.
However, the declines in corn came despite the good weekly export demand, with the USDA reporting corn sales of over two million tonnes.
WHEAT futures in Chicago were down by six to 13 cents per bushel on Friday, as soft weekly export data weighed on prices.
The USDA pegged weekly US wheat export sales at 303,700 tonnes, which was below trade estimates and seen as highlighting the poor international demand for US wheat. A stronger tone in the US dollar contributed to that sentiment, as the firmer currency will make US wheat even less attractive to global buyers.
Improving US moisture conditions put some further pressure on values.
However, short-covering at the lows did provide some underlying support.
– The European Union issued export licences for 553,000 tonnes of soft wheat during the pat week, bringing the total commitments during the crop-year-to-date to 8.7 million tonnes. That’s down from 12.0 million during the same timeframe the previous year, according to a report from France’s FranceAgriMer.
