By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, September 29 – THE ICE Futures Canada canola market recorded modest gains Tuesday as commercial buying, weakness in the Canadian dollar and spillover support from the US soy complex combined to lead the way higher.
Values temporarily broke above the key resistance point of C$480 per tonne before ultimately settling off the highs.
Malaysian palm oil was stronger while the bias remained tilted to the upside.
“The commercial interest has been very active as bean oil continues to stay firm,” said a trader.
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However, farmer selling pressured prices along with favorable weather that has helped the harvest.
There are ideas canola is pricing itself out of the market.
Around 32,438 canola contracts were traded on Tuesday, which
compares with Monday when around 21,572 contracts changed hands.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were eight to twelve cents per bushel higher on Tuesday, with short-covering ahead of Wednesday’s USDA quarterly stocks report providing some support.
Many market participants are of the opinion that the USDA over-reported the size of last year’s soybean crop, and will revise it lower when the stocks data is released.
The advancing US harvest and relatively favourable yield reports did limit the upside potential.
Concerns over declining demand from China were also overhanging the soy market.
SOYOIL settled higher on Tuesday, with advances in crude oil lending support to the vegetable oil markets.
SOYMEAL futures were higher on Tuesday, following soybeans.
CORN futures in Chicago were up by one to two cents per bushel on Tuesday, with positioning ahead of Wednesday’s USDA report a feature.
The report should provide the market with some insight on just how much corn was used by the domestic feed sector over the past quarter.
Crop ratings for the US corn crop were left unchanged at 68% good-to-excellent in the latest weekly report. Harvest pressure also helped keep corn rangebound overall.
WHEAT futures in Chicago were steady to down two cents on Tuesday, with expectations for larger year-on-year US wheat stocks in Wednesday’s report behind some of the selling pressure.
US wheat still remains overpriced in the global market, and the lack of significant export demand remained another bearish influence.
However, a slower-than-average seeding pace for next year’s US winter wheat crop did provide some support. Dryness concerns in Australia and Russia were also noted.
– The US winter wheat crop was 31% seeded as of this past Sunday, which compares with the 5-year average of 35% done. Wheat was 7% emerged, which compares with the average of 11% for this time of year.
– South Africa’s wheat crop will likely be 3.3% lower than earlier thought, according to updated data from the country’s Crop Estimate’s Committee. Citing poor growing conditions, the committee is now forecasting wheat production at 1.64 million tonnes, which would be the smallest crop since 2011.
