North American Grain/Oilseed Review: Commercial Demand Takes Canola Higher
By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
November 6, 2014
Winnipeg – ICE Futures Canada canola market settled higher on Thursday, as solid end user demand and a lack of significant farmer selling provided support.
The nearby canola contracts remain at an inverse with the more deferred positions, which highlights the strong nearby demand from the country, said participants. Exporters and domestic crushers both have commitments to fill, but farmers are reluctant sellers as they move to the sidelines for the winter. As a result the market was said to be trying to encourage more farmer sales.
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A firmer tone in CBOT soybeans, weakness in the Canadian dollar, and some light speculative short-covering were also supportive for canola.
However, CBOT soyoil and Malaysian palm oil were both weaker, which did temper the upside potential in canola. The record large US crop prospects and improving weather conditions in South America also put some pressure on values.
About 28,503 canola contracts were traded on Thursday, which compares with Wednesday when 20,239 contracts changed hands. Spreading accounted for about 10,896 of the contracts traded.
Milling wheat and durum were both untraded, but barley saw some light activity and moved higher.
SOYBEAN futures in Chicago jumped five to eight cents per bushel Thursday after a report was released by the US Department of Agriculture showing export sales that surpassed analysts’ expectations. According to the USDA, private exporters sold 1.6 million metric tonnes for delivery in 2014/15. That is up 28 percent from the previous week.
Sluggish sales from South America are also supporting US soybeans as well, according to a report.
Some orders for soymeal have been cancelled, according to the USDA, which limited the gains.
SOYOIL futures were lower on Thursday, with spreading against soymeal a feature.
SOYMEAL futures ended sharply higher leading to the upside in the soy complex.
CORN futures in Chicago moved higher Thursday, gaining spillover support from soybeans.
The USDA pegged corn yields at 175.2 bushels per acre in yesterday’s crop report. That is up from last month’s estimate of 174.2 bushels an acre. Production is pegged at 14.551 billion bushels, also an increase over last months’ estimate.
Ethanol production for the week ended October 31 was down 0.85 percent from the week previous, according to a report.
WHEAT futures in Chicago ended four cents per bushel lower due to disappointing export sales, caused in part, by a stronger US dollar.
Some western portions of the US Southern Plains are still suffering from excess dryness, according to a report.
According to the USDA, US ending stocks will hit 660 million bushels in 2014/15. That is up from last month’s estimate of 654 million bushels.
– Field mice destroyed over six percent of Romania’s wheat harvest, according to a report.
– Pakistan has imposed a 20 percent import duty on wheat in a bid to shore up sales of its domestic supplies, participants said.
– Mid-term elections in the US saw the defeat of proposed measures in Oregon and Colorado that would have called for labelling of foods with genetically modified ingredients.
Settlement prices are in Canadian dollars per metric ton.
