By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG – The ICE Futures Canada canola market was stronger on Monday, underpinned by short covering amid sentiment that the market is oversold, analysts said.
The evening of positions ahead of Tuesday’s monthly USDA supply and demand report was also bullish.
Further spillover support came from the advances seen in European rapeseed, Chicago soybean and soymeal futures.
The advances were exaggerated by light activity, according to traders.
However, the upside was limited by strength in the Canadian dollar and weakness in Chicago soyoil values.
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The large global oilseed supply situation was also overhanging the market.
About 9,674 contracts changed hands on Monday, which compares with Friday when 9,880 contracts traded. Spreading accounted for 5,332 of the trades.
Milling wheat, durum and barley futures were all untraded. Though, the Exchange moved wheat prices higher after Monday’s close.
SOYBEAN futures in Chicago rose six to eight cents per bushel higher Monday, as expectations grew the USDA will lower forecasts for domestic inventories in its monthly supply and demand report, due out March 10.
In pre-report guesses, analysts pegged US domestic ending stocks at 379 million bushels, which was slightly lower than the previous estimate of 385 million bushels.
Soybeans may also have been correcting higher from last week when they dipped 5 per cent, suggested a participant.
Worries about flooding hurting Argentina’s soybean crop were also bullish.
SOYOIL futures in Chicago finished 28 points lower Friday, with spreading against soymeal a feature. Spillover pressure came from the declines seen in Malaysian palm oil values.
SOYMEAL futures ended higher, supported by spreading against soyoil.
CORN futures in Chicago rose one to four cents per bushel on expectations the USDA report will predict smaller domestic corn supplies. Analysts put in pre-report guesses that supplies on August 31 would total 1.822 billion bushels, which was slightly less than the previous total of 1.827 billion bushels.
The market is seeing better recent export sales than initially expected, said a trader.
Support is also coming from ideas that the US planted area for corn will be down in the coming year.
WHEAT futures in Chicago finished seven to eight cents per bushel higher Monday, as renewed signs of demand buoyed the market.
US wheat is continuing to be bought by domestic end users, despite reports last week that some supplies contained vomitoxin, according to analysts.
Wheat also saw some upward movement as traders squared positions ahead of Tuesday’s USDA report.
• Russia plans to allocate aid to its farmers to take into account rising prices for seeds and fertilizer, according to a report. Between 50 to 75 million rubles could be set aside for subsidies.
• Wheat milling stocks in the Ukraine totaled 5.2 million tonnes as of March 2, say participants.
• Weaker local currencies in many parts of Asia are slowing demand for wheat as many customers have resorted to making “hand-to-mouth” purchases, according to a report.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
