North American grain/oilseeds review: canola ends steady to lower

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Published: December 18, 2014

By Terryn Shiells and Dave Sims, Commodity News Service Canada

WINNIPEG, Dec. 18 – ICE Futures Canada canola contracts ended steady to lower on Thursday, with prices succumbing to a sell-off in the last minute of trade.

Activity was choppy as traders squared positions ahead of the January contract’s expiry, and before the holidays, with Christmas just a week away.

Speculators were said to be on both sides of the market, with export activity and farmer selling both on the quite side, according to analysts.

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Ideas that canola is overpriced compared to other oilseeds weighed on values, as did the upswing in the value of the Canadian dollar.

Further downward pressure came from the weak crude oil market and good conditions for the South American soybean crop.

Though, strength seen in Chicago soybean and soyoil futures helped to underpin the market, as did steady commercial demand for Canadian canola.

About 31,739 contracts changed hands on Thursday, which compares with Wednesday when 22,775 contracts traded. Spreading was a feature of the activity, accounting for 19,668 of the trades.

Milling wheat, durum and barley were all untraded, though the Exchange moved wheat prices lower after Thursday’s close.

CORN futures in Chicago ended two to three cents per bushel higher Thursday due to renewed optimism over China’s decision to allow US dried distillers’ grains into the country.

A report by the USDA said 126,000 metric tonnes of corn had been booked for export by an unnamed country.

Corn stocks in China are at a 13-year high, which capped the gains.

SOYBEAN futures in Chicago rose eight to nine cents per bushel higher Thursday, led by fund buying and technical action. The USDA reported soybean exports of 1.5 million metric tonnes to China during the 2015/16 marketing year.

Russia has not cancelled any imports of US soybeans despite the fact its currency is down 50% this year, according to a report.

Some slight concerns over the quality of US soybeans were also supportive.

However, a generally favourable weather outlook for the soybean crop in South America limited the gains.

SOYOIL futures were higher with reasonable demand on Thursday, according to a report.

SOYMEAL futures also ended higher, with good demand lifting the market.

WHEAT futures in Chicago ended six to seven cents per bushel higher Thursday and two to four cents per bushel higher on the Kansas City Board of Trade as Russia indicated it would only issue export certificates to four of its customers. Egypt, India, Turkey and Armenia are the only countries that Russia will export grain to as it tightens export restrictions in a bid to safeguard wheat for domestic use.

The Russian gridlock has cast US wheat in a positive light as some customers believe it offers more certainty than other supplies from the Black Sea region.

Net sales of US wheat for the week ended December 11 pushed up eight percent compared to the week prior. Net sales totalled 476,300 metric tons which topped earlier projections by analysts.

• The wheat crop in Argentina is reportedly big enough to satisfy Brazilian demand in 2015. One analyst said Brazil will have no need to import US wheat as a result.

• Metrological reports in Australia indicate the eastern part of the country has a moderate chance of exceeding its median rainfall amount from January to March.

• Brazilian imports of fertilizer have increased dramatically, reaching 22.4 million tonnes from January to November of this year, according to a report. That is up 11.4 percent over last year.

ICE Futures Canada settlement prices are in Canadian dollars per metric ton.

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