By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
April 8, 2014
Winnipeg – ICE Futures Canada canola contracts were up sharply for the second day in a row on Tuesday, as chart signals pointed higher.
Speculative buy-stops were hit on the way up, with the nearby May contract settling just below nearby resistance at C$470 per tonne.
A turn higher in the CBOT soy complex, especially soyoil which had been lower earlier in the day, contributed to the gains in canola, said traders.
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While farmer selling did slow the advances to some extent, the hedges were not aggressive and were only coming in on a scale-up basis as cash prices were not improving to the same extent as the futures, according to participants.
Profit taking at the highs did put some pressure on values. A stronger tone in the Canadian dollar also served to limit the gains.
About 33,365 canola contracts were traded on Tuesday, which compares with Monday when 29,611 contracts changed hands. Spreading accounted for 30,932 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Monday’s close.
CORN futures in Chicago ended six to seven cents a bushel higher Tuesday as growing expectations that a USDA report, due to be released tomorrow, will forecast a reduction in domestic US corn supplies.
The monthly supply-and-demand report will probably forecast supplies at the end of the crop year on August 31 at 1.403 billion bushels, down from last month’s 1.456 billion-bushel estimate, according to analysts surveyed by the Wall Street Journal.
Early forecasts for dry, warm weather this week in the Mississippi Delta and Southeastern corn belt were expected to give farmers the chance to get field-work done. However, rain is now expected to fall over the weekend which could delay efforts.
Technical issues prompted the Chicago Stock Exchange to halt trading of corn and wheat contracts about 45 minutes before close.
WHEAT futures in Chicago rose four to five cents a bushel on drier forecasts for the western US plains the rest of the week.
So far this season, precipitation has been scattered and located in the east-central regions of the production zone.
US grain shipments are expected to account for 36% of total world exports in the 2013-14 growing season, the lowest total since 1960.
SOYBEAN futures at the Chicago Board of Trade were nine to 18 cents higher Tuesday as investors hedged their positions a day before this month’s USDA monthly supply/demand report comes out. The report is widely expected to forecast tightening US soybean ending stocks.
Export premiums in Brazil and Argentina were also weak which hurt futures even more.
Increased supplies of soybean exports from South America are expected to help alleviate tight supplies in the US.
SOYOIL futures were higher Tuesday.
SOYMEAL futures were slightly higher on Tuesday as investors wait to hear the USDA report, due out Wednesday.
– Indonesia is preparing to cut its 20 per cent import tariff on wheat flour in favour of a quota system, said an official with country’s trade ministry. The decision could come into effect sometime in May.
– The rising price of Russian wheat exports is expected to slow down soon due to a drop in the global price of the grain, according to a Russian agricultural consultant. Russian wheat prices have added 9 percent in dollar terms since the beginning of the year.
– Egypt’s supply minister remains steadfast his country will not agree to a lowering of standards over wheat import, despite international pressure.
Settlement prices are in Canadian dollars per metric ton.
