By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Dec. 16 – ICE Futures Canada canola contracts ended mixed on Tuesday, with the January contract seeing the only gains. Those advances were linked to short covering ahead of the holidays and the contract’s expiry, brokers said.
Slow farmer selling, recent weakness in the Canadian currency and strong demand for Canadian canola were also supportive. The market remains at an inverse, indicating strong nearby demand for the commodity.
The rest of the contracts moved lower in sympathy with outside oilseeds, including Chicago soybeans and soyoil futures.
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The large US soybean supply situation, good weather for South American oilseed production and profit taking on recent gains were also bearish.
About 23,773 contracts changed hands on Tuesday, which compares with Monday when 23,969 contracts traded. Spreading was a feature of the activity, accounting for 20,580 of the trades.
Durum and barley futures were untraded and unchanged. Milling wheat was also untraded, though the Exchange made some slight adjustments following Tuesday’s close.
CORN futures in Chicago ended one to two cents per bushel lower Tuesday due to a pickup in farmer selling into US cash markets, according to a report.
Speculation that China may soon begin accepting dried distillers’ grains, which are created with corn-based ethanol, prompted many producers to try and take advantage of a spike in prices.
Growing concerns about falling oil prices were also bearish, as the recent weakness could reduce demand for corn in the ethanol industry, traders said.
There are reports that some of Ukraine’s corn shipments to China could be cancelled as Ukraine is concerned about running short of its own domestic supplies, which was slightly supportive as it made US corn seem more attractive.
SOYBEAN futures in Chicago fell 14 to 16 cents per bushel Tuesday on ideas that values were overbought and reports of reduced demand from soybean processors.
Weather in South America has been close to “perfect” for crop development, which further undermined values, according to a trader.
Soymeal values have softened as of late which has also pushed soybeans lower.
SOYOIL futures were 45 to 50 points softer on Tuesday, partially dragged down by recent weakness in crude oil, according to a report.
SOYMEAL futures also ended lower, with lacklustre demand for the commodity behind the weakness.
WHEAT futures in Chicago ended four to five cents per bushel higher, and seven to eight cents per bushel higher on the Kansas City Board of Trade, as rumours swirled that Russia could impose export restrictions on its wheat crop. The Russian ruble has plunged in value fuelling worries that Russian sellers could look outside the country to sell their product, potentially leading to food-shortages in Russia.
The threat of export restrictions has prompted some short-covering by outside investors, market watchers said.
However, weather conditions in the US southern plains remain favourable for wheat, which limited the upside. Profit-taking at the highs of the day was also bearish.
• Iran imported nearly US$1.3 million worth of wheat in the first eight months of their buying year (Mar 31 – Nov 21). That is an increase of 67 percent compared to the same time-frame in 2013, according to a report.
• A newly completed rail-line running through the countries of Turkmenistan, Kazakhstan and Iran will dramatically improve that region’s grain markets to the Middle East, analysts said.
• Pakistan’s wheat reserves currently sit at 6.5 million tonnes, reports say.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
