By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Jan. 27 – The ICE Futures Canada canola market ended slightly lower on Tuesday, after a day of choppy two-sided trade.
Downward pressure came from the weakness in the Chicago soy complex, and expectations of record large South American soybean production.
Sentiment that canola is overvalued compared to other oilseeds was also bearish, as was strength in the Canadian currency. Though, the loonie remains very weak and at five-year lows.
On the other side, speculative based buying interest was supportive. Spec fund accounts were pushing the long canola, short soy spread as far as they could for a good portion of the day, analysts said.
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Steady end user demand for Canadian canola supplies kept a firm floor under the market.
About 18,253 contracts changed hands on Tuesday, which compares with Monday when 18,197 contracts traded. Spreading accounted for 12,670 of the trades.
Milling wheat, durum and barley futures were all untraded. Though, the Exchange moved wheat prices lower following Tuesday’s close.
SOYBEAN futures in Chicago ended nine to 10 cents per bushel lower Tuesday, as yields for Brazil’s soybean crop were better than average, analysts said. The grading was done from the roughly 5% of the crop that’s been harvested so far.
The US government confirmed that China has cancelled an order for 120 thousand tonnes of soybeans, which was also bearish.
Technical selling and some profit-taking also contributed to the declines, according to a report.
SOYOIL futures ended nine points higher, staging a late-day rally. Spreading against soymeal was a feature of the activity.
SOYMEAL futures ended lower as traders took profits following Monday’s gains.
CORN futures in Chicago finished three to four cents per bushel lower Tuesday amid concerns about export demand, traders said.
Ideas persist that the corn crops in both Brazil and Argentina will be good this year, which also weighed on the market.
The March contract declined as far as US$3.80 per bushel, before finding some support at that mark to end off the session lows.
WHEAT futures in Chicago finished one to three cents per bushel lower Tuesday. Kansas City Board of Trade wheat futures were four to five cents per bushel lower as large global stocks and poor export demand weighed on values.
Wheat prices initially climbed after the Euro rebounded against the US dollar, but were unable to sustain the momentum, brokers said.
Ukraine has reportedly decided to cap its exports of milling wheat between January and June at 1.2 million tonnes.
– Argentina’s grain exports could soon be on the rise as President Cristina Fernández de Kirchner winds down her time in office. A new report suggests a more liberal grain export regime will likely be established once her term expires in August.
– Iran has imported US$2.1 billion worth of wheat since March 21, 2014, according to a report. That is roughly twice the amount compared the previous year.
– Monsanto is reportedly considering building a plant in Russia.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
