By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
February 27, 2015
Winnipeg – ICE Futures Canada canola contracts were stronger at Friday’s close, as a rally in CBOT soyoil and month-end positioning provided support.
Soyoil was up by nearly a penny per pound in the May contract, which was supportive for crush margins. The rising margins made canola more attractively priced to end use customers, and domestic processors and exporters were both noted buyers, according to participants.
Some light speculative buying interest was also noted, although canola did run into some resistance from a chart standpoint.
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Scale up farmer selling also helped to temper the advances. The large South American soybean crop overhanging the global oilseed markets was another bearish influence, although an ongoing truckers’ strike in Brazil was slowing the flow of soybeans from the continent.
About 30,465 canola contracts were traded on Friday, which compares with Thursday when 31,863 contracts changed hands. Spreading accounted for 16,420 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT soybean futures ended mostly higher on Friday, riding on the coattails of a rally seen in Chicago soyoil futures, analysts said. Values settled two cents US per bushel lower, to seven cents higher.
Ongoing worries about logistics problems in Brazil were also supportive, as they could shift more of the global demand for soybeans to the US.
However, the large global supply situation, and expectations that buyers will favour purchasing South American supplies once logistics improve, limited the upside.
SOYOIL futures were up sharply on Friday, with strength in Malaysian palm oil values helping to fuel the advances, brokers said. Spreading against soymeal also supported the commodity.
SOYMEAL futures were slightly lower, undermined by spreading against soyoil. Profit taking on Thursday’s gains was also bearish, participants said.
CORN futures in Chicago finished three to five cents US per bushel higher on Friday, following the sharp advances seen in wheat, traders said.
Short covering ahead of the end of the month, and the weekend, was also underpinning the market, as was spillover from the strength in soybean futures.
However, the large global supply situation and signs that Chinese demand for US corn is slowing limited the advances.
WHEAT futures in the US ended five to 14 cents US per bushel higher, lifted by news that extremely cold weather caused some winterkill damage to winter wheat crops in parts of Illinois and Indiana.
Traders are also worried that more crops in the regions will be damaged by another round of freezing temperatures Friday night, market watchers said.
However, the large global supply situation, a continued lack of fresh export demand and profit taking at the highs of the day limited the gains.
• Russia exported 57 per cent less wheat in February year over year, mainly because of the new export tax that was introduced on February 1, according to reports.
• The National Association of Wheat Growers in the US announced they will hold a new national wheat yield contest in an effort to increase US wheat production.
• Japan’s Ministry of Agriculture, Forestry and Fisheries is increasing the average price paid by domestic millers for imported wheat by three per cent.
Settlement prices are in Canadian dollars per metric ton.
