By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Jan. 18 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Thursday, taking some direction from soybeans at the Chicago Board of Trade.
A lack of significant farmer selling contributed to the gains, according to traders, with many producers thought to be holding out for higher prices for the time being.
Concerns over a lack of moisture across much of Western Canada were also a bit supportive as spring seeding draws nearer.
However, a generally bearish technical outlook tempered the upside, with any advances seen as a good selling opportunity as fund traders add to their net short positions of about 20,000 contracts.
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Losses in CBOT soyoil and declining crush margins also put some pressure on values.
About 11,151 canola contracts traded on Thursday, which compares with Wednesday when 19,364 contracts changed hands. Spreading accounted for 6,890 of the contracts traded.
Shifting weather reports out of South America provided some underlying support for soybeans at the Chicago Board of Trade on Thursday. While rain is in the forecasts for some dry areas of Argentina, temperatures remain hot and more moisture will likely be needed.
Slow selling out of Brazil, as farmers there hold out for better prices, was also supportive.
However, continued weakness in the global vegetable oil markets, including palm oil and soyoil, kept a lid on soybeans.
Corn futures were down on Thursday, as speculators moved to the sell side and the market saw a modest correction after hitting its best levels in two weeks yesterday. Increased farmer selling added to the declines.
Wheat futures were mixed, with gains in the Chicago and Kansas City contracts, and a softer tone in Minneapolis spring wheat.
Speculative short-covering was supportive, while the recent weakness in wheat has also brought in more export demand.
The International Grains Council raised its estimate for world grain production this year to 2.1 billion tonnes, due to better wheat crops in both Russia and Argentina. However, production is still expected to be down from last year’s record of 2.14 billion tonnes. Of the total, wheat was pegged at 757 million tonnes, which would be up by 8 million from an earlier estimate.
