By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 13 (CNS Canada) – ICE Futures canola contracts were narrowly mixed on Wednesday, with losses in the front months and gains in the new crop contracts.
Adjustments to the intermonth spreads were a feature of the activity. The July/November spread moved from an inverse to a carry position.
Large old crop supplies and a lack of significant end user demand accounted for some of the weakness in the front months, according to participants.
Losses in Chicago Board of Trade soyoil also put some spillover pressure on values.
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However, chart support held to the downside, as the March contract tested below C$480 per tonne but managed to close above that level.
About 32,283 canola contracts traded on Wednesday, which compares with Tuesday when 31,361 contracts changed hands. Spreading accounted for 31,070 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade moved to both sides of unchanged on Wednesday, settling with small losses.
Trade talks between the United States and China in Beijing this week were bringing some optimism to the soy market. However, the two countries have yet to reach a deal, and are unlikely to do so this week.
The advancing harvest in Brazil also weighed on values, especially as the latest weather forecasts were looking relatively favourable.
Recent rains in Brazil have helped alleviate some of the dryness concerns there, while wet areas of Argentina are reportedly drying out.
Brazil’s Conab released its latest production estimates, pegging the country’s soybean crop at 115.3 million tonnes. That was down by 3.5 million from an earlier estimate and also below the U.S. Department of Agriculture’s forecast of 117 million tonnes.
CORN held steady on the day, as the market continues to look for some direction.
While the improving South American weather conditions weighed on values, strength in crude oil and the optimism on the Chinese trade front were a bit supportive.
WHEAT futures were higher on the day as improving export sentiment provided some support.
U.S. wheat is looking more attractively priced on the global market, and traders had their eyes on a number of international tenders as they waited to see if any U.S. wheat was bought.
