By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, February 12 – THE ICE Futures Canada canola market finished stronger on Thursday, in sympathy with the US soy complex and speculative trading.
Follow-through buying on yesterday’s gains lent support to values in the early-going along with some slight advances in Malaysian palm oil.
The Canadian dollar was sharply stronger which limited the upside potential in canola, according to participants.
One trader suggested the Canadian dollar is also starting to find a new position, just under 80 cents US.
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“When the dollar has bottomed it will start undermining canola,” he said, noting it wouldn’t happen right away, “but the dollar is likely to be back and forth a bit.”
Weakness in European rapeseed futures were bearish along with expectations of a large global soybean crop.
Around 21,358 canola contracts were traded on Thursday, which compares with Wednesday when around 21,779 contracts changed hands. Spreading accounted for 17,108 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 by four to nine cents per bushel on Thursday, with solid weekly export demand behind some of the strength.
The USDA reported net weekly US soybean export sales of 746,200 tonnes, which was up considerably from the previous week and the four-week average.
Chart-based speculative buying interest and a weaker US dollar contributed to the advances, according to participants.
However, the large South American crop prospects and advancing harvest there did limit the advances.
SOYOIL futures were higher on Thursday, with gains in crude oil contributing to the firmer tone.
SOYMEAL futures finished higher on Thursday, following soybeans.
CORN futures in Chicago were down by one to three cents per bushel on Thursday, with losses in wheat behind some of the spillover selling pressure.
Brazil’s Conab released a report pegging the country’s corn crop at 78.3 million tonnes, which was down from an earlier estimate but still well above the 75.0 million tonnes currently forecast by the USDA.
Weekly US export sales of just over a million tonnes were somewhat supportive, helping keep corn rangebound overall.
WHEAT futures in Chicago were down by four to five cents per bushel on Thursday, as disappointing export sales and news of a ceasefire in Ukraine weighed on values. Minneapolis and Kansas City wheat futures were down one to six cents.
Weekly US wheat export sales of 418,800 tonnes were at the low end of trade estimates and were seen as a sign that US wheat still remains overpriced in the global market.
The ceasefire in Ukraine also raised expectations for increased grain exports from the Black Sea region, which would further cut into the demand for US wheat.
On the other side, weather uncertainty in some winter wheat growing regions of the world did remain somewhat supportive.
– Unionized CP Rail employees have given strike notice to the company. If negotiations fail over the next few days, workers could walk off the job over the weekend which would cause disruptions to grain movement in Canada.
– A labour dispute on the US West Coast should also see a partial shut-down of shipping movement in the region over the next four to five days.
– Egypt continues to negotiate with Russia to obtain an exemption from Russian wheat export restrictions, according to officials.
