By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Aug. 23 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Wednesday, as a rally in Chicago soyoil provided spillover support.
The soyoil gains were tied to news that the US would be imposing duties on imports of biodiesel from Argentina and Indonesia. That would effectively open the door for more domestic production of the renewable fuel, with soyoil and canola oil two major North American feedstocks.
A lack of significant farmer selling, weakness in the Canadian dollar, tight old crop supplies, and uncertainty over new crop production all added to the firmer tone in canola, according to participants.
However, canola settled well off its highs for the day, with the market stuck in a sideways trading range as the harvest starts up across the Prairies. Positioning ahead of the August 31 Statistics Canada production report was another feature.
About 19,403 canola contracts traded on Wednesday, which compares with Tuesday when 11,006 contracts changed hands. Spreading accounted for 5,918 of the contracts traded.
Milling wheat, durum, and barley were all untraded, although prices were revised after the close.
Soybean futures at the Chicago Board of Trade settled with small gains on Wednesday, after trading to both sides of unchanged in choppy activity.
Mixed yield estimates coming out of a crop tour of key US growing regions this week provided little direction, with some areas beating expectations and others somewhat disappointing.
While fresh export business reported by the USDA this morning provided some support, the government agency also reported large cancellations of old crop business by China.
News that the US would be imposing import duties on biodiesel from Argentina and Indonesia gave soyoil a boost, which provided some underlying support for beans.
Corn prices were three to four cents per bushel lower on the day, with chart-based selling a feature as some stops were hit on the way down to fresh contract lows.
The varied crop tour results kept some caution in corn today, as investors look to get a better handle on the size of this year’s crop.
Nearby weather forecasts look relatively favourable for the developing crops, adding to the softer tone.
Wheat posted small gains in most months, as the market managed to see some consolidation following recent declines. Persistent concerns over the size and quality of the US spring wheat crop also provided some support.
However, world wheat supplies remain large overall which put some pressure on values.