By Phil Franz-Warkentin, Commodity News Service Canada
February 13, 2015
Winnipeg – ICE Futures Canada canola contracts were stronger at Friday’s close, hitting their highest levels since July 2014, as bullish chart signals, gains in CBOT soybeans, and a lack of farmer selling all provided support.
Solid export demand contributed to the gains, with both China and Pakistan thought to have made some purchases earlier in the week, according to participants.
Some buy-stops were hit on the way up, exaggerating the upward move. A lack of farmer selling was also supportive, as producers made some sales earlier in the month and were now said to be moving back to the sidelines as widening basis levels in Western Canada discouraged country movement.
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Canadian and US markets will be closed on Monday, and positioning ahead of the long weekend was a feature.
The Canadian dollar was stronger on Friday, which tempered the advances to some extent. Ideas that canola was looking overbought also put some pressure on values, according to participants.
About 28,431 canola contracts were traded on Friday, which compares with Thursday when 21,358 contracts changed hands. Spreading accounted for 22,150 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were up by five to eight cents per bushel on Friday, as traders were busy covering short positions ahead of the long weekend. Gains in crude oil and a weaker US dollar were also supportive for the grains and oilseeds overall
Solid export demand was also supportive for soybeans, with the USDA reporting a fresh sale of 110,000 tonnes to China this morning.
However, the Chinese Lunar New Year holiday is next week and ideas that nearby demand will slowdown in the short term did temper the gains.
The large South American crop remains a bearish influence as well, with producers in Brazil continuing to make good progress bringing in this year’s crop.
SOYOIL futures were higher on Friday, with gains in crude oil contributing to the firmer tone.
SOYMEAL futures finished higher on Friday, following soybeans.
CORN futures in Chicago were up by four to five cents per bushel, taking some direction from the gains in wheat and soybeans.
The advances in crude oil were supportive for corn, as optimism grew over rising demand from the ethanol sector, according to participants.
WHEAT futures in Chicago were up by eight to 12 cents per bushel, with short covering ahead of the long weekend a feature. Minneapolis and Kansas City wheat contracts posted similar advances.
In addition to the short covering bounce, wheat felt an added boost from the updated weather forecasts. Cold temperatures are expected over the weekend across parts of the Southern Plains, which could cause some damage to the winter wheat crops there as fields are just starting to come out of dormancy.
Settlement prices are in Canadian dollars per metric ton.
