Winnipeg Commodity Exchange: Canola and Grain Futures See Steady Gains

Strategic Insights -

Grain and oilseed futures on the Winnipeg Commodity Exchange (WCE) are anticipated to rise on Monday, with expected strength stemming from short-covering and firmer calls in CBOT soybeans and corn. Traders expect canola futures to increase by C$1 to C$3 in response to higher calls in CBOT soybeans. The recent weakness in the Canadian dollar is seen as an underlying support for canola values, while exporters remain uninterested in paying up for canola at current price levels.

Key Takeaways:

  • Canola futures are expected to rise by C$1 to C$3 in reaction to higher calls in CBOT soybeans.
  • Short-covering is anticipated, with some traders believing that position evening ahead of the WCE's move to electronic based trade on December 20 may contribute to this.
  • The recent weakness in the Canadian dollar is seen as an underlying support for canola values.
  • Exporters are not interested in paying up for canola at current price levels, with Japan not being aggressive at current levels.
  • The C$280 level is seen as a resistance level for both the January and March contracts.
  • The Jan/Mar canola spread is expected to be a feature in the day's trade as participants continue to roll out of the nearby January contract.
  • Western barley futures are called C$0.50 to C$1.00 higher at the open.
  • Heavy selling hit the barley market hard at Friday's close, with traders expecting a short-covering bounce on Monday.
  • Higher calls in CBOT corn are expected to provide some underlying support, but there is also the potential for follow-through selling.
  • Large feed grain supplies continue to weigh on the market.

Statistics:

  • C$1 to C$3: expected gain in canola futures in response to higher calls in CBOT soybeans.
  • C$0.50 to C$1.00: expected gain in Western barley futures at the open.
  • C$280: resistance level for both the January and March contracts.
  • December 20: WCE's move to electronic based trade.

Sources:

  • Resource News International via COMTEX
  • COMTEX (http://www.comtexnews.com)