By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Jan. 6 (MarketsFarm) – The ICE Futures canola market settled at fresh contract highs on Wednesday, with the largest advances in the old crop contracts amid concerns over tightening supplies.
The most active March contract settled above the psychological C$650 per tonne level, which was supportive from a chart standpoint.
Solid end-user demand contributed to the gains, as values continued to climb higher in an effort to ration some of that buying interest.
Scale-up farmer hedges and strength in the Canadian dollar put some pressure on values, tempering the advances.
About 24,380 canola contracts traded on Wednesday, which compares with Tuesday when 34,822 contracts changed hands. Spreading accounted for 14,574 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Wednesday amid persistent South American production concerns.
Dryness in Brazil and Argentina over the course of the growing season has cut into the crop prospects there, which is keeping China in the market for U.S. soybeans.
Chart-based buying was a feature, with some stops likely hit on the way up.
CORN was also supported by solid demand and the dry South American crop conditions.
A move by Argentina to suspend corn exports until the end of February in order to shore up domestic supplies contributed to the gains. Farmers in the country plan on holding a 72 hour strike to protest the ban, as it will result in lower domestic prices for them.
Weekly ethanol data showed a slight increase in U.S. production of the renewable fuel, to 935,000 barrels per day.
WHEAT futures were lower, as speculative profit-taking took prices off their nearby highs.
However, the gains in corn and ongoing weakness in the U.S. dollar provided some support.
A reduction in wheat exports out of Ukraine this year, according to the latest estimates out of the country, also kept the losses in check.