By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Jan. 30 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Tuesday, as advances in Chicago Board of Trade soybeans and soyoil provided spillover support.
Speculators covering short positions and routine commercial buying interest accounted for much of the activity, while farmer selling on the other side remains relatively quiet.
Canola briefly climbed to some of its best levels of the past month, but ran into resistance at the highs to hold within its longstanding sideways trading pattern.
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Recent strength in the Canadian dollar, ample old crop supplies, and expectations for record seeded area this spring all weighed on prices as well.
About 24,189 canola contracts traded on Tuesday, which compares with Monday when 21,304 contracts changed hands. Spreading accounted for 16,872 of the contracts traded.
Ongoing concerns over dryness in Argentina remained supportive for soybeans, with prices rising to their best levels since early December on Tuesday. Meanwhile, forecasts calling for rain in Brazil also underpinned the futures, as the moisture there could delay harvest operations at this time of year.
Weakness in outside vegetable oil markets did put some pressure on values, but most of the strength in beans came from the meal side of the equation on Tuesday.
Corn futures were firmer on the day, following wheat and soybeans.
The dryness concerns in Argentina and ideas that United States corn is looking attractively priced into China were also supportive.
However, large export competition out of Brazil put some pressure on values.
Wheat futures were higher, with declining condition ratings for the U.S. winter wheat crop providing the catalyst for the move up. Kansas City hard red winter wheat led to the upside, as only 14 per cent of the state’s wheat crop was rated good-to-excellent in the latest U.S. Department of Agriculture report.
That was down from 37 percent a month ago, and 44 per cent at the same point a year ago.
Chart-based short covering added to the strength in wheat, with some stops hit on the way up.
However, the large world supply situation continued to weigh on values. Ideas that North American spring wheat acres will likely be up this year also kept the Minneapolis futures lagging to the upside.
