By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, June 28 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Wednesday, with the biggest gains in the nearby July contract as traders exited the front month ahead of its expiry.
Tight old crop supplies, gains in Chicago soybeans, and bullish nearby chart signals all contributed to the advances in canola, according to participants.
However, the market ran into resistance, as a sharp rise in the Canadian dollar relative to its US counterpart weighed on values. The currency was up by more than three-quarters of a cent at about 76.6 US cents.
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Statistics Canada releases its updated acreage estimates on Thursday, June 29, while the USDA’s acreage numbers will be out on Friday, June 30. Positioning ahead of the two reports led to some volatility in the futures.
About 25,827 canola contracts traded on Wednesday, which compares with Tuesday when 20,832 contracts changed hands. Spreading accounted for 11,838 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 closed three to four cents per bushel higher on Wednesday, supported by weakness in the US dollar.
The American currency declined sharply on Wednesday, pressured by domestic economic data and stalled healthcare legislation.
A lower US dollar is bullish for the country’s commodities as it makes them more affordable for international buyers.
Concern about US weather moving forward also kept some support in the market.
SOYOIL prices closed mixed, but mostly unchanged on Wednesday.
SOYMEAL ended higher on Wednesday.
CORN futures closed about one to two cents per bushel weaker on Wednesday.
The market was feeling pressure from favourable weather in the US, which will support crops during the key pollination period.
The progressing South American harvest added to the weakness.
Large supplies coming on-stream from Brazil and Argentina are bearish.
However, weakness in the US dollar limited the market’s downside.
WHEAT finished three to four cents per bushel higher in Chicago on Wednesday, while Minneapolis spring wheat was up by 15 to 23 cents.
A lower US dollar was one supportive factor, as it boosts the grain’s affordability internationally.
Poor crop conditions in the US spring wheat regions, accounted for the rally in Minneapolis that spilled into the other wheat markets, as there is little beneficial moisture in the nearby forecasts.
Positioning into the Grain Stocks report due out on Friday from the United States Department of Agriculture was also a feature.
