By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 12 (CNS Canada) – ICE Futures canola contracts were stronger on Tuesday, taking some direction from gains in Chicago Board of Trade soybeans and soyoil.
After dropping sharply on Monday, canola was looking overdone to the downside and due for a corrective bounce, according to participants.
Signs of improving export demand were also supportive.
However, exports continue to run behind the year-ago pace with large supplies overhanging the market.
Strength in the Canadian dollar, which was up by about a third of a cent, also tempered the advances and canola held within its well-established sideways trading range.
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About 31,261 canola contracts traded on Tuesday, which compares with Monday when 25,432 contracts changed hands. Spreading accounted for 25,294 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were stronger on Tuesday, as Monday’s losses uncovered some chart support and speculators returned to the buy side.
Trade talks underway between the United States and China in Beijing this week were bringing some optimism to the soy market. Reports that U.S. lawmakers had reached a tentative deal on border security that would help avert another government shutdown, also underpinned the futures.
Declining production estimates out of Brazil were another supportive influence, although the advancing harvest in the South American country tempered the advances.
CORN futures also moved higher on the back of improving Chinese trade sentiment.
The USDA reported a flash sale of 122,000 tonnes of corn to unknown destinations this morning, providing additional support.
Strength in crude oil was another bullish influence for the ethanol-linked grain.
WHEAT futures ended mixed, with gains in Minneapolis and Chicago, but a softer tone in Kansas City hard red winter wheat.
Talk that Russia has no plans to restrict exports any time soon, despite tightening stocks in the country, put some pressure on wheat throughout the day.
Overnight losses in European wheat markets also weighed on values, although ideas that U.S. wheat is looking more attractively priced on the global export market were somewhat supportive.
