By Glen Hallick, MarketsFarm
WINNIPEG, Dec. 31 (MarketsFarm) – Intercontinental Exchange (ICE) Futures canola contracts finished steady to lower Tuesday, but bounced back from much larger losses in most of the session.
A Winnipeg-based trader noted year-end selling dominated the market today, essentially overpowering any support from the news regarding the Phase One trade agreement between the United States and China.
There was some positive traction from the announcement that the Phase One trade agreement is scheduled to be signed on Jan. 15. However, the trader said the markets have been a little skeptical towards Phase One for two reasons, with one being that China has refused to say what the agreement’s details are. The second is Chinese Vice-Premier Lui He will sign the deal rather than President Xi Jinping.
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By mid-afternoon Tuesday, the Canadian dollar was higher at 77.01 U.S. cents compared to Monday’s close of 76.58. The loonie’s gains were largely due to the U.S. dollar losing ground to other world currencies, as it has before at this time of the year.
The markets will be closed Jan. 1 for the New Year holiday.
There were 14,568 contracts traded on Tuesday, which compares with Monday when 17,350 contracts changed hands. Spreading accounted for 10,348 contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
Price Change
Canola Mar 478.10 dn 1.10
May 487.50 dn 0.70
Jul 493.80 dn 0.20
Nov 497.30 dn 0.30
SOYBEAN futures at the Chicago Board of Trade (CBOT) were slightly higher on Tuesday, following a tweet by President Trump regarding Phase One of the trade agreement with China.
Market analysts expect trading volumes to be lower than usual until the U.S. Department of Agriculture (USDA) issues its January supply and demand report. Along with the World Agricultural Supply and Demand Estimates (WASDE), the USDA is also scheduled to release its final 2019/20 production report. As well, the department will issue its grain stocks as of Dec. 1 and its initial assessment of 2020 winter wheat plantings.
Dry conditions in South America have raised concerns about the soybean crops in Argentina, Brazil and Paraguay. Crop forecasts from government and private sources called for record harvests in 2020, but those could be downgraded in the coming weeks.
CORN futures were steady to lower on Tuesday, as it remained in a consolidation pattern, searching for a direction.
As with soybeans, corn crops in South America are also facing dry conditions which could affect production.
WHEAT futures were higher on Tuesday, aided by a weaker U.S. dollar.
Expectations are China will purchase more U.S. wheat after signing the Phase One trade deal.
Similar to South America, dry conditions in Russia and Ukraine is said to be hurting wheat production. That has helped to push Black Sea wheat futures to their highest levels since April.
