By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Dec. 14 – ICE Futures Canada canola contracts held onto small gains at Monday’s close, after trading to both sides of unchanged in choppy activity.
Continued weakness in the Canadian dollar, together with a slightly firmer tone in CBOT soybeans contributed to the eventual advances in canola, according to participants.
The soft currency has helped crush margins move to some of their best levels of the past year in recent weeks, which was keeping exporters and domestic crushers on the buy side.
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A lack of significant farmer selling, as producers move to the sidelines ahead of the seasonal Christmas slowdown, was also supportive.
However, canola tested nearby chart resistance to the upside which tempered the gains. Losses in CBOT soyoil and the generally large supply situation in Western Canada also slowed the advances.
About 24,676 canola contracts were traded on Monday, which compares with Friday when 25,412 contracts changed hands. Spreading accounted for 14,448 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed a quarter of a cent per bushel lower to three-and-a-half cents per bushel higher Monday on investor short-covering ahead of a decision from the US Federal Reserve.
Many analysts expect the Fed will raise interest rates, which would boost the US dollar—making the country’s commodities less competitive internationally.
The expectation that Argentina’s new president will soon reduce export taxes on soybeans also limited gains.
SOYOIL prices settled mixed, but mostly lower, on Monday, tracking Malaysian palm oil.
SOYMEAL closed stronger on Monday.
CORN futures closed three to nine cents per bushel stronger on Monday, also supported by investor short-covering.
A slight gain in crude oil futures on Monday also provided some support.
WHEAT closed three to five cents per bushel stronger on Monday, as the market positioned ahead of the Fed’s interest rate decision.
However, the expectation that Argentina’s president will cut export taxes on wheat could weigh on prices in coming sessions.
– US spring wheat basis levels saw a steep drop off last week, market watchers say.
– Brazil may need to double the amount of wheat it imports, according to reports out of the country, due to poor harvest.
