By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 26 (CNS Canada) – ICE Futures Canada canola contracts were up sharply on Monday, posting gains for the sixth straight session as both the fundamentals and technicals provided support.
Weather concerns out of Argentina remained a supportive influence, as forecasts calling for hot and dry weather over the next few weeks should cut further into the soybean production prospects in the South American country. Gains in Chicago Board of Trade soyoil and soymeal were supportive for canola, but soybeans ended the day slightly lower in most months.
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Bullish technical signals and weakness in the Canadian dollar contributed to the gains in canola, as speculators built on long positions and prices looked attractive to end users.
However, farmers are still sitting on large old crop canola supplies and hedge selling tempered the advances. Expectations for an increase in seeded canola area this spring also weighed on values.
About 45,140 canola contracts traded on Monday, which compares with Friday when 19,808 contracts changed hands. Spreading accounted for 22,110 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were narrowly mixed at Monday’s close, retreating from early gains in most months. Profit-taking came forward after weather concerns in Argentina initially helped the market hit its best levels of the past year.
Production estimates continue to be revised lower out of the country, with the lack of rainfall in the nearby forecasts likely to see those estimates downgraded even more.
Chart-based buying added to the early gains in soybeans. However, soybeans ran into some profit-taking as the day progressed.
CORN futures hit some of their highest levels in five months, with the new crop December contract briefly touching the US$4.00 per bushel mark before backing away.
Excessive rain in Brazil was raising concerns over seeding delays for that country’s second corn crop, which is planted after the soybeans are harvested.
WHEAT futures were mixed on the day, with gains in the Chicago and Kansas City winter wheat contracts, and losses in Minneapolis spring wheat as the spreads saw some adjustment.
Dryness concerns across the U.S. Plains kept wheat supported to start the week, while cold temperatures in Europe and the Black Sea region could be causing problems for winter wheat crops there.
Traders expect to see downgrades to U.S. winter wheat condition ratings in the latest USDA report, set for release Monday afternoon.
