Winnipeg Commodity Exchange Grain and Oilseed Futures End Mixed as Canola Rises

The Winnipeg Commodity Exchange grain and oilseed futures closed with mixed results on Wednesday, with canola prices rising on talk of fresh export activity. The market saw light trade, with estimated volumes of 3,362 contracts in the canola spread trade and a total of 5,920 contracts traded, down from Tuesday's 7,030 contracts. Canola started the day steady to lower but turned higher, ignoring the weak tone in Chicago Board of Trade soy complex futures, according to trade sources. The firm Canadian dollar also weighed on the market, while slow farmer selling provided support due to sharp drops in cash bids and talk of solid export interest.

Key Takeaways:

• Canola prices rose as the market saw fresh export activity, with an estimated 3,362 contracts involved in the spread trade.
• The total estimated volume of 5,920 contracts was down from Tuesday's 7,030 contracts, indicating a decrease in market activity.
• Canola started the day steady to lower but quickly turned higher, ignoring the weak tone in Chicago Board of Trade soy complex futures.
• The firm Canadian dollar weighed on the market, making it more challenging for canola prices to rise.
• Slow farmer selling provided support due to sharp drops in cash bids and talk of solid export interest, particularly from Japanese and Chinese buyers.
• Thomas Mielke, publisher of Oil World, revealed that China is buying Canadian canola to crush while selling the oil to Europe for use as bio-diesel.
• Exporters were the best buyers on Wednesday, with most of the demand coming from Japanese crushers.
• The selling was commercial and speculative, with local and commission house shorting of the market prompted by weakness in CBOT values.
• Farmer pricing was described as "steady but light", indicating a lack of enthusiasm for selling from farmers.
• Feed grain futures ended narrowly mixed in light trade, with end-user demand slowed by the mild winter conditions.
• Western barley closed mainly a bit higher, with an estimated 103 contracts changing hands, down from 612 contracts on Tuesday.
• Feed wheat was mainly lower, with an estimated 90 contracts traded, down from Tuesday's 307 contracts.

Statistics:

• Estimated 3,362 contracts involved in the spread trade for canola.
• Total estimated volume of 5,920 contracts traded, down from Tuesday's 7,030 contracts.
• Firm Canadian dollar weighed on the market, making it more challenging for canola prices to rise.
• Sharp drops in cash bids influenced slow farmer selling, with 103 contracts traded for western barley, down from 612 contracts on Tuesday.
• Feed grain futures ended narrowly mixed in light trade, with 90 contracts traded for feed wheat, down from 307 contracts on Tuesday.

Sources:

• Resource News International, "Winnipeg Commodity Exchange grain and oilseed futures end mixed as canola rises", January 11, 2006.
• Oil World, Thomas Mielke, publisher, as reported by Resource News International.