By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 7 (CNS Canada) – ICE Futures canola contracts saw some wide price swings on Thursday before settling within a dollar of either side of unchanged.
Weakness in the Canadian dollar was a major supportive influence, as the currency fell by another half of a cent relative to its United States counterpart and crush margins widened.
A lack of significant farmer selling pressure, as extremely cold temperatures across much of the Prairies continued to delay country movement, was also supportive.
However, losses in the Chicago Board of Trade soy complex and a general ‘risk-off’ sentiment in the broader financial markets weighed on values, according to participants.
The U.S. Department of Agriculture is set to release a number of key reports on Friday, and pre-report positioning was a feature.
About 29,642 canola contracts traded on Thursday, which compares with Wednesday when 17,533 contracts changed hands. Spreading accounted for 23,244 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Thursday, as ideas that China and the United States are still far apart on reaching a trade deal weighed on values.
Forecasts calling for much needed rain in parts of Brazil also weighed on values as harvest pressure ramps up from the South American country.
Positioning ahead of Friday’s U.S. Department of Agriculture reports was another feature.
The USDA will release its monthly supply/demand report on Friday, along with some data from January that was delayed due to the government shutdown.
CORN futures were lower on the day, as losses in wheat and positioning ahead of Friday’s USDA reports weighed on prices.
Declining U.S. ethanol production also weighed on the renewable-fuel-linked grain.
WHEAT futures were all lower, with chart-based speculative selling a feature as prices backed away from nearby highs and some stops were hit on the way down.
Strength in the U.S. dollar index contributed to the softer tone in wheat, as the rising currency may cut into some export demand.
Wheat traders will be watching Friday’s USDA reports for winter wheat acreage estimates and the quarterly stocks numbers.