By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
March 19, 2015
Winnipeg – ICE Futures Canada canola contracts were stronger at Thursday’s close, with a weaker tone in the Canadian dollar helping the futures see some relative strength.
The Canadian dollar was down by roughly a cent relative to its US counterpart today, which makes exports more attractive and also benefits crush margins.
However, the currency has seen some large swings over the past two days, and the volatility on that front did keep some caution in the lightly traded canola market, according to participants.
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Chart based buying and solid commercial demand were both supportive. However, canola was said to be looking overpriced, and profit-taking at the highs did limit the advances.
The large South American soybean crop also remained a bearish influence in the background, while CBOT soybeans were also down on the day.
About 14,579 canola contracts were traded on Thursday, which compares with Wednesday when 16,153 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
CBOT soybean futures ended three to five cents US per bushel lower on Thursday, reacting to signs that export demand for soybeans is shifting to South America instead of the US, analysts said.
The large global supply situation, good production prospects in South America and expectations that US farmers will plant a record large amount of soybean acres this spring were also bearish.
However, concerns that another Brazilian trucker strike will occur in the coming weeks were supportive. Reports say it’s become less likely that truckers will settle their dispute with the government when they meet on March 26.
SOYOIL futures finished little changed, as support came from strength in Malaysian palm oil, and weakness in soybeans was bearish.
SOYMEAL futures were weaker, undermined by profit taking following recent gains. Though, signs of positive export demand limited the downside, traders said.
CORN futures in Chicago finished steady to one cent US per bushel lower on Thursday, seeing some profit taking after Wednesday’s rally.
Worries about the strong US dollar slowing export demand for US corn further undermined values. The USDA said weekly export sales fell 31 per cent compared to the previous four-week average.
However, expectations that US farmers will reduce corn acreage for 2015/16 kept a firm floor under the market, participants said.
WHEAT futures at the Chicago Board of Trade closed narrowly mixed Thursday, with values ending two cents per bushel lower, to two cents higher. Nearby contracts moved higher, while the more deferred positions were weaker. Minneapolis and Kansas City futures ended three to five cents lower per bushel.
Concerns about dry weather damaging US winter wheat production provided support, as did some short covering following recent losses.
On the other side, the strengthening US dollar index was bearish, as it made US wheat more expensive on the export market.
• The US sold 391,900 metric tons of old crop wheat, and 142,900 tons of new crop for export during the week ended March 12, the USDA said.
• Syria is looking for bread making wheat, as they issued a tender for 150,000 metric tonnes of SRW wheat, with a deadline of April 13, according to reports.
• Pakistan’s government announced it will impose a 25 per cent regulatory duty tax on any wheat or wheat products imported to protect the interest of its wheat producers.
Settlement prices are in Canadian dollars per metric ton.
