By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, December 21 – THE ICE Futures Canada canola market finished higher Monday, taking strength from gains in the vegetable oil market, speculative trading and currency issues.
Malaysian palm oil, Chicago soyoil and European rapeseed futures were all stronger which underpinned the market.
The Canadian dollar was weaker relative to its US counterpart which typically makes canola easier to sell on the international stage.
Slow farmer selling was supportive along with steady buying from crushers.
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Some areas in Brazil that grow soybeans are too dry, which was bullish for the market.
However, losses in CBOT soybeans dragged on values.
The weaker crude oil situation also limited the gains.
Around 34,364 canola contracts were traded on Monday, which compares with Friday when around 26,842 contracts changed hands. Spreading accounted for about 21,628 of the contracts traded.
Milling wheat, barley and durum were all 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 Monday, as expectations for increased export competition out of Argentina put some pressure on values.
Year-end position evening was a feature, although the early short-covering in the market slowed down as the day progressed.
Reports of poor weather conditions in parts of Brazil did provide some underlying support, with dryness causing problems in the northern part of the country and excessive moisture in the south.
SOYOIL settled higher on Monday, after trading to both sides of unchanged in choppy activity. Spreading against soymeal accounted for some of the strength.
SOYMEAL futures were down on Monday, following soybeans.
CORN futures in Chicago were down by one to three cents per bushel on Monday, as the expectations for increased exports out of Argentina also weighed on prices.
Losses in crude oil also weighed on corn, given the grain’s connection to ethanol production.
WHEAT futures in Chicago were down by six to eight cents per bushel on Monday, as poor export demand weighed on prices.
The rising US dollar is making US wheat even less attractive to international customers. Improving crop prospects in other wheat growing regions of the world – including Ukraine – contributed to the declines.
In addition, there were reports out of Russia that the country was considering cutting its export taxes on wheat, which would lead to increased competition in the global market.
– Russia’s wheat exports are currently running about five percent behind the previous year’s rate, due in part to the export tax, according to reports from the country’s agriculture ministry.
– While conditions are showing some improvement, Ukraine’s wheat crop in 2016 could be down significantly due to lower planted acres and drought conditions at seeding time, according to a report from France’s Agritel.
