North American Grain/Oilseed Review: Canola mixed as spreads adjusted

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Published: November 13, 2014

By Phil Franz-Warkentin, Commodity News Service Canada

November 13, 2014

Winnipeg – ICE Futures Canada canola contracts were mixed on Thursday, with the nearby months moving lower and the more deferred positions posting gains.

The market had been trading at an inverse earlier in the week, but was adjusting itself to trade with a more traditional carry built into the futures on Thursday, said participants.

Canola moved up across the board in sympathy with the CBOT soy complex in early activity. However, soybeans backed away from their highs and soyoil turned lower, which was bearish for canola. Chart based selling contributed to the losses in the front months, with some stops hit in the canola market as prices broke below nearby support, said participants.

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Increased farmer deliveries and softening demand from end users, as their nearby needs are thought to be met for the time being, contributed to the eventual weakness in canola, said a trader.

On the other side, the Canadian dollar was weaker on Thursday, which did provide some underlying support for canola.

About 28,930 canola contracts were traded on Thursday, which compares with Wednesday when 25,823 contracts changed hands.

Milling wheat, durum, and barley were all untraded.

SOYBEAN futures at the Chicago Board of Trade were up two to nine cents per bushel on Thursday, but settled well off their highs for the session as some profit-taking came forward to limit the advances.

The January soybean contract was generally said to be seeing some consolidation as it held above its 100-day moving average, according to participants.
Good export demand and concerns over logistics issues moving soymeal in the Midwest also remained supportive for beans.
However, there was also talk that the US is starting to import South American soymeal, in an effort to deal with the nearby tightness. The record large US crop also remains a bearish influence in the market, as it is likely only a matter of time before those big supplies fill up the pipeline.

SOYOIL futures finished lower on Thursday, retreating from earlier advances.

SOYMEAL futures were narrowly mixed on Thursday, seeing some consolidation after posting large gains recently.

CORN futures in Chicago were up five to eight cents per bushel on Thursday, with fund buying a supportive factor in the market.
Local reports out of both Ukraine and Argentina are predicting corn crops in those two countries a little smaller than what the USDA is currently forecasting, which helped underpin the Chicago futures as well.
However, the record large US crop did remain a bearish influence limiting the upside.

WHEAT futures in Chicago were up six to 11 cents per bushel on Thursday, with the wheat market also said to be benefiting from an increased inflow of speculative money.
In addition, cold weather conditions across the Southern Plains were said to be raising some concerns over the winter wheat crops there.
However, ideas that US wheat remains expensive in the global market did put some pressure on values, limiting the gains.

Settlement prices are in Canadian dollars per metric ton.

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