By Phil Franz-Warkentin, Commodity News Service Canada
December 5, 2014
Winnipeg – ICE Futures Canada canola contracts were up sharply on Friday, taking back nearly all of the losses posted over the past week as the market saw a corrective bounce.
Chart based speculative buying interest was a feature in canola, with some buy stops likely hit on the way up, according to participants. Gains in the CBOT soy complex and a weaker tone in the Canadian dollar were also both favourable for crush margins, which helped bring in some solid demand from domestic processors, said traders.
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A lack of significant farmer selling, as producers are thought to be holding out until the New Year, was also supportive.
However, profit taking at the highs did come forward to temper the gains.
The larger than expected canola production estimate released by Statistics Canada on Thursday was also a bearish factor in the background, as the larger crop will help loosen the supply/demand fundamentals going forward.
About 36,333 canola contracts were traded on Friday, which compares with Thursday when 38,015 contracts changed hands. Spreading accounted for 22,924 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
The USDA reported private export sales of 240,000 tonnes to unknown destinations this morning. That business came on the heels of Thursday’s favourable weekly export sales data, and was taken as a sign that international demand for US beans remains strong, according to participants.
However, the record large US crop and relatively favourable South American prospects did limit the upside potential
SOYOIL futures were higher on Friday.
SOYMEAL futures were up on Friday, boosted by solid end user demand and positioning ahead of the weekend.
CORN futures in Chicago were up four to five cents per bushel on Friday, as the market managed to see some follow through buying interest after yesterday’s solid weekly export news.
However, the large US supply situation did remain a bearish influence overhanging the corn market. Concerns over a slowdown in demand from the ethanol sector, given the recent weakness in crude oil, also kept corn from rising to the same extent as soybeans.
WHEAT futures in Chicago were up three to nine cents per bushel on Friday, as the market found some spillover support from the advances in corn and beans.
Much of the activity in wheat was technical in nature, although there were also still more than enough concerns over the state of the winter wheat crops in a number of regions of the world, including the US and Russia, to keep some weather premiums in the futures.
On the other side, Thursday’s upward revision to the size of the Canadian wheat crop by StatsCan did remain a somewhat bearish influence overhanging the US futures.
Settlement prices are in Canadian dollars per metric ton.
