By Phil Franz-Warkentin and Jade Markus, Commodity News Service
Winnipeg, Oct. 20 – ICE Futures Canada canola contracts were stronger on Tuesday, with the biggest gains in the more deferred positions as the November/January spread widened out to nearly seven dollars.
Gains in CBOT soyoil accounted for some spillover buying interest in canola, according to participants.
Chart support also held to the downside, with the November contract trading as low as C$468 per tonne at one point during the day before recovering to settle well above the C$471 per tonne level that has marked solid nearby support for the past week.
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On the other side, a firmer tone in the Canadian dollar did put some pressure on canola, according to traders. The rising production ideas for both the US soybean crop and the Canadian canola crop were also somewhat bearish.
About 49,363 canola contracts were traded on Tuesday, which compares with Monday when 25,204 contracts changed hands. Intermonth spreading was a feature, as participants rolled positions out of the nearby November contract. A large number of EFS’ (exchange of futures for swaps) were also a factor in the heavy volumes.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed four to five cents per bushel higher on Tuesday as investor short covering and new export data supported prices.
Traders became active again in the soybean market, short covering after four sessions of losses.
Fresh data from the United States Department of Agriculture showed buying interest from China, bringing bullishness back into the market.
Private exporters have booked new sales of 132,000 metric tonnes of soybeans for delivery to China during the 2015-16 marketing year, according to the USDA.
SOYOIL prices settled higher on Tuesday following soybean futures.
SOYMEAL closed lower on Tuesday
CORN futures closed two to three cents per bushel stronger on Tuesday, mostly led by soybean futures.
Market watchers say investor short-covering was also a feature.
However harvest progress and limited export demand capped gains, and kept the outlook for corn bearish.
WHEAT closed four to five cents per bushel stronger on Tuesday as the US dollar weakened.
Depreciation in the US dollar makes the country’s wheat more competitive globally, as importers get more bang for their buck.
Additionally, analysts say wheat was trying to form a bottom in previous sessions, which may be why futures gained on Tuesday.
However, favourable weather in competing growing regions kept a bearish lid on prices.
– Ukraine’s winter wheat crops have only sprouted on 30 per cent of fields due to dryness, according to the country’s Agriculture and Technical Policy director.
– US winter wheat seeding is about 76 per cent done, the country’s latest crop report says.
