By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
February 26, 2015
Winnipeg – ICE Futures Canada canola contracts were mixed at Thursday’s close, with losses in the nearby March contract and firmer tone in the more deferred months as the intermonth spreads saw some adjustment.
The March/May spread widened to a larger carry on Thursday, with the May contract finishing C$8.40 above the front month after trading at an inverse as recently as Tuesday.
Gains in CBOT soybeans and soyoil, solid commercial demand, a weaker tone in the Canadian dollar, and ideas that recent losses were overdone all helped underpin the canola market, according to participants.
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On the other side, Wednesday’s losses did do some damage from a chart standpoint and speculators were likely reluctant to add to their long positions, according to a trader. The large South American soybean crop overhanging the global oilseed markets was also a bearish influence.
About 31,863 canola contracts were traded on Thursday, which compares with Wednesday when 32,309 contracts changed hands. Spreading accounted for 22,670 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures ended six to 16 cents US per bushel higher on Thursday, underpinned by ongoing worries about logistical problems moving soybeans to Brazilian ports and crush plants. If movement continues to be slow out of the country, buyers are more likely to source soybeans from the US.
Short covering ahead of the end of the month and strong demand for soymeal in the US added to the bullish tone, market watchers said.
However, expectations that South America’s logistics problems will clear themselves soon limited the upside, as did the large global supply situation.
SOYOIL futures were firmer Thursday, following the gains seen in soybeans.
SOYMEAL futures were also stronger, with continued good demand for the commodity behind the advances, brokers said.
CORN futures in Chicago finished four to five cents US per bushel higher on Thursday, following the advances seen in soybean futures, analysts said.
Slow farmer selling in the US, short covering ahead of the end of February, and steady domestic end user demand were also supportive.
However, expectations that US farmers will plant a big crop in 2015/16 limited the advances, as did the large global supply situation.
WHEAT futures at the Chicago Board of Trade ended three to five cents US per bushel firmer Thursday, finding spillover support from the gains in soybeans and corn.
Sentiment that the market is oversold, as prices fell below US$5.00 per bushel in the nearby contracts on Wednesday, further underpinned values.
However, forecasts calling for beneficial snowfall in the US southern plains limited the advances. The snow should help protect winter wheat crops from winterkill.
Minneapolis and Kansas City wheat futures ended narrowly mixed, consolidating after recent sharp losses, traders said.
• US exporters sold 459,000 tonnes of wheat for export during the week ended February 19, the USDA said, adding that 328,300 tonnes were for 2014/15 delivery, and the remaining 130,700 tonnes were for 2015/16.
• India’s government says they won’t export any surplus wheat supplies this year, and plan to continue selling into the domestic market.
• An aggressive strain of the yellow rust fungus has been found in many United Kingdom wheat crops, and could cut production by up to 25 per cent, reports say.
Settlement prices are in Canadian dollars per metric ton.
