By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Jan. 30 – The ICE Futures Canada canola market ended stronger on Friday, finding good support from the sharply lower Canadian currency, analysts said.
The loonie fell below the 79 cents US mark on Friday, making canola more attractive to buyers pricing in the US currency.
Spillover support also came from the advances seen in Chicago soyoil futures, which were supported by news of fresh export demand.
Steady end user demand for Canadian canola was also underpinning the market, as was chart-based buying.
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However, Chicago soybean futures moved lower on Friday, which limited the upside potential for canola.
Ideas that canola supplies remain very comfortable in Western Canada and expectations of record large South American soybean production were also bearish.
About 22,752 contracts changed hands on Friday, which compares with Thursday when 26,196 contracts traded. Spreading accounted for 15,284 of the trades.
Milling wheat, durum and barley futures were all untraded, though the Exchange moved wheat prices lower after Friday’s close.
SOYBEAN futures in Chicago ended seven to eight cents per bushel lower Friday, as favourable weather conditions in South America stirred speculation of future heavy exports from Brazil.
The strength of the US dollar was bearish as it made US soybeans more expensive on the international market.
A grain agency lowered its forecast for Brazil’s soybean crop from nearly 96 million tonnes down to 95 million, which helped to limit the losses.
SOYOIL futures in Chicago corrected higher Friday, jumping 45 points on the board, as values rebounded following Thursday’s session when the March contract reached its lowest point since the spring of 2009.
SOYMEAL futures ended lower due to slowing domestic livestock demand for feed. Spreading against soyoil was also a feature.
CORN futures in Chicago hit two-month lows on Friday as huge inventories of corn in both South America and North America weighed on values.
Ukraine has a lot of product that could be moved, said a trader, which further undermined values.
US farmers may not be persuaded to plant as much corn as expected in the spring, if prices stay low through February, said an analyst.
WHEAT futures in Chicago moved five to six cents per bushel lower Friday and six to eight cents, with the March contract temporarily falling below US$5.00 a bushel for the first time since October 6 as fears grew of an oversupply of grain on the world market.
Snow in the US southern plains is expected to aid winter wheat crops as it should give them some insulation from the cold.
Funds are building up their short positions, according to an analyst.
• Some major wheat-growing areas of Argentina are expected to get an intense mix of heat and rain over the next few days, according to a report.
• Kyrgyzstan and Tajikistan experienced some favourable weather conditions during winter wheat planting which could lead to increased production this year, analysts said.
• Tunisia is reportedly shopping around for 117,000 tonnes of soft milling wheat.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
