North American Grain/Oilseed Review: Canola ends up, but soybeans down

By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada

Winnipeg, Aug. 31 (CNS Canada) – ICE Futures Canada canola contracts were stronger on Wednesday, seeing a corrective bounce off of their nearby lows as news that China would delay imposing stricter dockage rules for the time being provided support.

China had been set to lower the amount of dockage it would allow in Canadian canola shipments from 2.5 per cent down to one per cent on September 1, but a deal has been reached to extend that deadline as further negotiations take place.

Chart based buying added to the gains in the futures, according to participants.

However, losses in Chicago Board of Trade soybeans and soyoil tempered the upside in canola, and values settled well off their session highs. The most active November canola contract had been up by as much as C$15.50 per tonne at one point, but finished the day only C$5.20 higher.

Seasonal harvest pressure also kept a lid on the rally, according to traders.

About 33,568 canola contracts were traded on Wednesday, which compares with Tuesday when 16,612 contracts changed hands.

Milling wheat, durum, and barley were all untraded.

SOYBEAN futures at the Chicago Board of Trade closed five to eight cents per bushel weaker on Wednesday, moving lower with seasonal selling pressure.

Month-end contract liquidation was also a feature.

The expectation for a large upcoming crop added to the declines.

However, strong demand for US soybeans from China underpinned the market and limited losses.

SOYOIL prices closed weaker on Wednesday.

SOYMEAL closed lower on Wednesday.

CORN futures were mostly unchanged on Wednesday, recovering somewhat from technically oversold levels.

Investor short-covering further supported prices.

The crude oil market declined in early activity, but was on track for monthly gains, which was another bullish factor.

Stronger energy prices increase the likelihood that processors will blend above mandated amounts of biofuel.

However, advances in the US dollar capped gains.

A stronger greenback makes the country’s commodities less appealing to international buyers.

WHEAT declined two to five cents per bushel on Wednesday, as follow-through selling pressured the market.

A bearish supply and demand situation added to the declines, especially as the greenback is in the midst of a rally.

– Japan tendered for 120,000 metric tonnes of feed wheat, but was not met with any offers, market watchers say.

– Ukraine has responded to a wheat tender from Egypt, analysts say.