By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Dec. 2 – ICE Futures Canada canola contracts were narrowly mixed at Wednesday’s close, retreating from earlier gains as the buying interest dried up and traders worked to square positions ahead of Friday’s StatsCan production report.
The nearby January contract hit a session high of C$477.30 per tonne, but settled at C$471.40; which was only up a dime from Tuesday’s close.
Gains in CBOT soyoil and supportive chart signals contributed to the early gains in canola, with some stops hit on the way up as values tested nearby resistance, according to participants.
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Continued weakness in the Canadian dollar, which remains below 75 US cents, also underpinned the futures as exchange rates are looking more favourable for export customers.
However, steady farmer selling and Canada’s large supply situation limited the gains, and eventually helped take prices back to unchanged.
Statistics Canada releases its updated production estimates on Friday, most industry participants are expecting an upward revision of at least a million tonnes from the 14.3 million tonne crop estimated in October.
About 43,235 canola contracts were traded on Wednesday, which compares with Tuesday when 30,348 contracts changed hands. Spreading accounted for 31,294 of the contracts traded.
Milling wheat, durum, and barley were all untraded, although wheat prices were revised after the close.
SOYBEAN futures at the Chicago Board of Trade closed three to five cents per bushel higher on Wednesday, supported by dry conditions in Brazil.
Dryness in Brazil has put the country’s crops at risk, and if it impacts production, will make more room for US crops in the market.
However, rain is forecasted for Brazil, which could pressure prices in coming sessions.
Soybeans have also been coasting on market talk of strong demand for oilseeds, though no fresh news emerged on Wednesday.
SOYOIL prices settled stronger on Wednesday.
SOYMEAL closed stronger on Wednesday.
CORN futures closed two and a half to three and a half cents per bushel weaker on Wednesday on the expectation that Argentina will produce a bigger crop next year.
The country’s newly elected president has said he will remove export taxes on corn and wheat.
Analysts say Argentina’s corn crop could go up by as much as 10 per cent as farmers substitute the corn for soybeans.
Weak demand for US corn further added to the bearish tone.
WHEAT closed four to five cents per bushel weaker on Wednesday, also pressured by the expectation that Argentinian producers will grow more of the commodity.
High global supplies and lacklustre demand further pressured prices.
However, demand for wheat could improve going forward, market watchers say, as prices etch steadily lower.
– Chicago wheat futures are near contract lows, analysts say.
– A market watching group says Ukrainian exports to Turkey will likely go up this year as Russia imposes sanctions.
