By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, February 9 – The ICE Futures Canada canola market ended slightly higher Monday after a session of volatile trading. Traders positioned themselves ahead of the release of Tuesday’s USDA crop report.
The market was also propped up by spillover buying in soybeans and vegetable oil.
The Canadian dollar was slightly weaker against its American counterpart which made canola more attractive to crushers and exporters.
A rise in crude oil helped to support canola indirectly, according to a trader.
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The main part of the South American harvest is looming nearer which is pressuring values as expectations are the crop will be very large.
Around 19,194 canola contracts were traded on Monday, which
compares with Friday when around 19,605 contracts changed hands.
Spreading accounted for 11,554 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 up three to five cents per bushel on Monday, with solid export demand and speculative short-covering behind some of the buying interest.
The USDA reported that China purchased 120,000 tonnes of US soybeans, which was seen as a sign that US supplies were still looking competitive compared to the large South American crops that are starting to come on the market.
While Brazil is still forecast to grow a record large soybean crop this year, some private forecasters are downgrading their expectations.
The USDA releases its monthly reports on Tuesday, February 9, and positioning ahead of the data accounted for some of the activity. In addition to domestic supply/demand projections, the USDA data will also include adjustments on the world outlook.
SOYOIL futures were up on Monday, taking some direction from the advances in soybeans.
SOYMEAL futures finished narrowly mixed on Monday as participants squared positions ahead of Tuesday’s report.
CORN futures in Chicago were up by four to six cents per bushel on Monday, with positioning ahead of Tuesday’s USDA report a feature.
General expectations are for tighter US corn supplies in the report, although they should still be very large overall.
Gains in crude oil were also somewhat supportive for corn, given the grain’s connection to ethanol production.
WHEAT futures in Chicago were up one to three cents per bushel on Monday, after bouncing around both sides of unchanged in choppy activity. Kansas City futures posted similar gains, but the spring wheat contracts in Minneapolis settled narrowly mixed, with many months down by up to a penny on the day.
While ideas that US wheat is looking more attractively priced in the global market did remain somewhat supportive, the lack of any significant fresh business has serving to diminish that optimism, according to participants.
Winter wheat conditions remain relatively favourable across the US Plains, although there are still enough areas of concern to keep some weather premiums in the wheat markets.
– The European Union issued export licenses for a record 1.67 million tonnes of soft wheat during the week ended February 3, according to reports. The weakening euro and Russian export restrictions were behind the rising demand.
– Officials in Egypt, the largest wheat importer in the world, indicated that it may soon purchase US wheat.
