By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
November 5, 2014
Winnipeg – ICE Futures Canada canola market settled higher on Wednesday, recovering from early declines as good commercial demand and a lack of farmer selling provided support.
Speculators holding short positions were also being squeezed out, and forced to buy some of those positions back amid the lack of farmer selling, said an analyst.
The record large US soybean crop and favourable weather conditions for soybeans in South America contributed to some of the early weakness in canola, according to participants.
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However, the market turned higher with the biggest gains in the front months. The strength in the nearby’s was tied in part to commercial demand, with exporters and domestic crushers being forced to pay up in order to encourage reluctant farmers to make some sales. An eventual turn higher CBOT soybeans was also supportive for canola.
About 20,239 canola contracts were traded on Wednesday, which compares with Tuesday when 18,673 contracts changed hands. Spreading accounted for about 11,158 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CORN futures in Chicago rebounded five to six cents per bushel Wednesday as traders looked for bargains during the final stretches of the fall harvest.
Forecasts for warm, dry weather in the US corn belt are a bearish influence hanging over the market, said participants.
Crude oil is at its lowest price level since 2011, which was initially bearish for values, according to a report. However oil showed some recovery late Wednesday.
SOYBEAN futures in Chicago rose five to 10 cents per bushel Wednesday after values sunk below the US$10.00 mark, triggering buy-stops, and ultimately sparking a rally that resulted in significant gains.
There are ideas yesterday’s victory by Republicans in the mid-term elections could be beneficial for large equity funds, according to a report.
Three new cases of bird-flu in China prompted some concerns among investors, said a market-watcher.
SOYOIL futures were 37 points lower on Wednesday, taking some direction from the overnight losses in Malaysian palm oil with spreading against soymeal a feature.
SOYMEAL futures ended higher tracking soybeans.
WHEAT futures in Chicago ended four to five cents per bushel lower on Wednesday as much-needed rainfall continued to blanket the southern portion of the US Great Plains. Oklahoma, Texas and Kansas all received generous amounts of moisture which should aid development of winter wheat, said an analyst.
The stronger US dollar and sluggish export demand also weighed on values, participants remarked.
– There are concerns that strong rainfall over the past four days could cause an outbreak of disease in Argentina’s wheat plants. The downfall has reportedly generated excess humidity among large wheat-growing areas.
– Kyrgyzstan’s wheat harvest is nearly complete. Sources peg this year’s wheat production at 670,000 tonnes.
– Egypt has put out a tender for the purchase of soft milling wheat, according to a report.
Settlement prices are in Canadian dollars per metric ton.
