By Phil Franz-Warkentin and Jade Markus, Commodity News Service
Winnipeg, August 25 – ICE Futures Canada canola contracts were mixed at Tuesday’s close, with losses in the nearby November contract and a firmer tone in the more deferred positions.
A recovery in the North American equity and energy markets helped lend some underlying support to canola throughout the session, with gains in CBOT soybeans and soyoil also helping give the Canadian futures a boost, according to participants.
Production uncertainty and the need to keep some weather premiums in the futures helped underpin canola as well, especially as some demand will likely need to be rationed going forward.
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However, canola was looking overpriced compared to other oilseeds, which limited the upside.
Intermonth spreading was also bearish for the front month, as participants were selling the nearby November contract and buying in the more deferred positions.
About 32,721 canola contracts were traded on Tuesday, which compares with Monday when 19,353 contracts changed hands. Most of the activity was linked to spreading, which accounted for over 30,000 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed one to six cents per bushel stronger Tuesday on indications that currencies and stock markets were rebounding after sharp losses Monday.
Prices were also supported by a weekly USDA crop report which reported soybean crop conditions steady after analysts had predicted improvement.
Additionally, news that soybean sales had gained, based on data from a USDA export report added to the bullish tone.
SOYOIL prices settled stronger on Tuesday following soybean futures.
SOYMEAL closed stronger on Tuesday following neighbouring markets.
CORN futures closed three to four cents per bushel weaker Tuesday, as a weekly USDA crop report said US crops were maturing more quickly than expected.
Prices were also pressured by recovery in the US dollar, which is bearish.
A stronger greenback makes US exports less affordable and less appealing for foreign buyers.
WHEAT futures in Chicago closed six to eight cents per bushel lower Tuesday as analysts say the market is looking for a bottom.
Market watchers say wheat has little to no bullish factors, and prices are searching for a seasonal low.
A higher US dollar, high global supplies and a lack of demand all added to the bearish tone.
Wheat futures could continue to sink as global sellers keep pushing prices lower in an attempt to rally demand, traders say.
– US spring wheat harvest is 75 per cent complete. The average for this time of year is 47 per cent, analysts say.
– Australia’s crops are progressing well with favourable rains.
