By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Dec. 17 – ICE Futures Canada canola contracts ended firmer on Wednesday, finding some spillover support from the gains in Chicago soybean futures.
Though, canola has been outpacing the US markets to the upside so far this week, analysts said.
Strength in canola is linked to chart-based buying, and continued steady demand for the oilseed. Both domestic crushers and exporters remain routine buyers.
Slow farmer selling into western Canadian cash markets was also supportive, as they are waiting for the new tax year before making any big moves.
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However, the Canadian dollar was firmer on Wednesday, which was limiting the upside, as was weakness in Chicago soyoil futures.
The large US soybean supply situation and good weather for South American oilseed crops were also bearish.
About 22,775 contracts changed hands on Wednesday, which compares with Tuesday when 23,773 contracts traded. Spreading was a feature of the activity, accounting for 14,972 of the trades.
Milling wheat, durum and barley were all untraded. Though, the Exchange moved wheat prices higher following Wednesday’s close.
CORN futures in Chicago ended one to two cents per bushel higher Wednesday with reasonable demand and spillover support from wheat.
“Corn sales have been a two-sided trade today,” said Sean Lusk, a director with the commercial hedging section of Walsh Trading in Chicago, Illinois.
He added US export data, which is due to be released on Thursday, would give investors a better sense of the near-term direction.
Ukraine is offering assurances to China that it will deliver supplies that were previously ordered.
SOYBEAN futures in Chicago rose three to five cents per bushel higher Wednesday, underpinned by spillover support in the wheat market while under pressure from improved weather reports for South America.
A group of Chinese businessmen in Chicago signed some contracts on Tuesday, however they were said to be largely ceremonial in nature. One trader said the Chinese delegation contacted just one million tonnes of soybeans this year, compared to the four or five million tonnes that had been expected.
Charts show soybeans can still move back down to US$10.00 per bushel in the next few weeks, a participant said.
SOYOIL futures were slightly lower on Wednesday, pressured by recent weakness in crude oil, according to a report.
SOYMEAL futures ended higher, seeing an upward correction following Tuesday’s losses.
WHEAT futures in Chicago ended 20 to 25 cents per bushel higher as speculation continues to mount that Russia, which is one of the world’s biggest wheat producers, will begin to restrict exports to ensure it has enough supplies for its own use.
In the US Southern Plains, conditions are expected to remain favourable over the next few days, but then turn colder late next week.
Wheat has now risen above the highs seen between May and August of this year, according to a report.
• India’s wheat exports are expected to drop sharply this year due to high domestic prices and fierce international competition, according to a report. Exports are projected to be around 3 million tonnes in 2014/15, about half of what the country exported last year.
• Traders say Australian wheat prices have jumped above the $300 a tonne level in many regions for APW grade grain.
• US farmers may cut back on phosphorus fertilizers in the 2015 growing season due to concerns over profitability, according to reports.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
