By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, Feb. 19 – The ICE Futures Canada canola market ended higher on Thursday, following the climbing Chicago soybean market, analysts said.
The weaker Canadian dollar also contributed to the advances, as it encouraged fresh crusher buying, and made canola less expensive to foreign buyers.
Some speculative buying interest, steady commercial demand and strength in Chicago soymeal values added to the bullish tone.
However, Chicago soyoil futures moved lower on Thursday, spilling over to weigh on Canadian canola prices.
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Sentiment that the market is oversold and expectations of large South American soybean production also limited the upside.
Farmers were said to be routine sellers at the highs, though they were waiting for even higher prices and warmer weather in Manitoba and Saskatchewan.
About 32,205 contracts changed hands on Thursday, which compares with Wednesday when 23,336 contracts traded. Spreading accounted for 23,444 of the trades.
Milling wheat, durum and barley futures were all untraded, though the Exchange moved wheat and barley prices lower after Thursday’s close.
SOYBEAN futures in Chicago finished nine to 12 cents per bushel higher Thursday, as a report from the USDA suggested US farmers could trim this year’s acreage by 0.2% due to falling profit margins. The industry expected US bean acreage would rise this year.
However, the large South American crop, which is almost a third harvested, has been drawing a lot of interest from China which was bearish.
After showing strength earlier in the week, US basis levels have reportedly weakened which also helped to cap the gains.
SOYOIL futures in Chicago finished 14 to 18 points lower Thursday with spreading against soymeal a feature of the activity.
SOYMEAL futures ended higher following soybeans. Strong demand from livestock producers was also one of the reasons behind the price increase, according to a trader.
CORN futures in Chicago climbed five to six cents per bushel higher Thursday as a new report by the USDA predicted US farmers would plant just 89.0 million acres of corn this spring, down from last year’s total of 90.6 million acres.
Spillover support from the gains in Chicago soybean values added to the bullish tone.
However, relatively large world stockpiles of corn and sluggish sales of US corn overseas pressured values.
Falling crude oil prices also helped to weigh down values as it made ethanol less attractive compared to cheap gasoline.
WHEAT futures in Chicago trended mostly lower Thursday, falling about four cents per bushel, undermined by the large global supply situation and strong US dollar index.
Further downward pressure came from a continued lack of fresh export demand for US wheat, as foreign buyers say prices are still too expensive, analysts said.
A recent cold snap in the Midwest didn’t damage the winter wheat crop, a trader said, which was also bearish.
However, expectations of lower acreage in the US for 2015 limited the downside. The USDA pegged at acreage 55.5 million acres in 2015/16, down from 56.8 million acres last year.
• Russia’s 2015 winter grain production could fall by more than 40 per cent due to poor crop conditions, according to a report from the Russian government.
• Egypt reportedly decided not to buy a large shipment of US wheat last week because the price was 25 per cent higher than what it has been paying for European supplies.
• India has decided to leave its food welfare program untouched despite recommendations that it be phased down, reports said. The program provides ultra-cheap rice and wheat to most of its people.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
