By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
May 8, 2014
Winnipeg – ICE Futures Canada canola contracts settled sharply higher on Thursday, with gains in CBOT soybeans and soyoil providing the catalyst for the speculative rally.
Good end user demand contributed to the advances, according to traders, as canola remains very cheap compared to other oilseeds. Concerns over planting delays across parts of Western Canada, due to cool and wet conditions, were also said to be supportive.
However, seeding was also delayed in 2013, when farmers ended up with record yields, said a trader. Increased producer selling at the highs, the stronger Canadian dollar, and the burdensome old crop supplies that continue to overhang the market also kept canola from breaking above nearby resistance, said participants.
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About 17,137 canola contracts were traded on Thursday, which compares with Wednesday when 8,297 contracts changed hands. Spreading accounted for 7,800 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade surged as high as 23 cents per bushel Thursday on signs of continued demand from international buyers.
According to the USDA, 140,000 metric tonnes of soybeans were sold to unknown buyers for delivery in the twelve months that begin in September. US exporters have sold over 40,000 tonnes of soybeans for delivery in the current marketing year, that amount will support the market due to low domestic stockpiles.
Futures consolidated ahead of tomorrow’s USDA report while enduring global demand for soybeans helped underpin the market.
SOYOIL futures were higher following soybeans but held range-bound overall.
SOYMEAL futures trended higher following soybeans.
WHEAT futures in Chicago drifted two to three cents per bushel lower and two to five cents per bushel lower for Kansas City wheat as rain fell in parched regions of the southern Great Plains.
The precipitation was felt from north Texas through Oklahoma, providing moisture to lands that have been mainly dry for the past six months, according to a report.
Spring wheat planting in the northern states is still behind schedule but the rain is expected to aid soil conditions in the days ahead, said analysts.
Investors squared positions ahead of the USDA supply/demand report which is due out tomorrow.
CORN futures in Chicago were two to three cents per bushel higher on ideas that warm, dry weather has helped farmers get their fields planted.
By Monday, analysts expect the percentage of planted corn acres in the US, which presently stands at 29%, to be farther advanced.
The June ethanol contract was slightly up, which is considered bullish.
– New research suggests rising CO2 levels may cut the nutritional quality of wheat. Studies show zinc and iron were both reduced in wheat-fields grown with CO2 concentrations.
– India’s wheat crop is expected to be a record 104 MMT, according to Informa Economics.
– Global wheat stockpiles will probably rise to 186.8 MMT by May 31, according to a Bloomberg survey.
Settlement prices are in Canadian dollars per metric ton.
