By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service
June 3, 2015
Winnipeg – ICE Futures Canada canola contracts were stronger on Wednesday, as gains in CBOT soyoil, supportive technical signals, Canadian weather issues, and activity in the outside currency markets all provided support.
Mounting concerns over yield and acreage losses, following the recent frost in the eastern Prairies and ongoing dryness in the west, accounted for much of the strength in canola, according to participants. Speculators were covering short positions and adding to new longs.
Read Also
North American Grain/Oilseed Review: Positives for canola, CBOT
Glacier FarmMedia -– Canola futures on the Intercontinental Exchange increased on Monday, reversing course from earlier losses. Chicago soyoil…
Gains in CBOT soyoil and the weaker Canadian dollar contributed to the advances, as those two factors were both supportive for crush margins.
However, scale up farmer selling did limit the upside potential and canola ran into some chart resistance as well, according to participants. Losses in CBOT soybeans also served to keep a lid on the Canadian market.
About 38,324 canola contracts were traded on Wednesday, which compares with Tuesday when 45,255 contracts changed hands. Spreading accounted for 21,228 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures were steady to six cents weaker on Wednesday, after trading stronger earlier in the day. Farmer selling came in at the highs to push prices lower, traders said.
The large global oilseed supply situation and generally favourable weather conditions for soybeans in the US were also
bearish.
However, continued support came from Monday’s USDA report, which said US farmers had planted 71 per cent of their soybean acres as of Sunday, below expectations of 75 per cent, according to an analyst.
SOYOIL futures were stronger Wednesday, with some of the buying linked to expectations that the USDA will increase their soyoil used in biodiesel estimates in their upcoming monthly supply and demand report on June 10.
SOYMEAL futures were narrowly mixed, seeing a consolidation following recent large price swings.
CORN futures in Chicago finished steady to slightly higher, seeing gains of up to 2 cents US per bushel. Signs of increasing demand for US corn underpinned the market.
Data from the US Energy Information Administration shows ethanol production in the US rose to its highest level in four months last week, signalling strong domestic demand for corn.
Export demand for US corn has also started to pick up, as the price has come down enough to attract international buyers, according to a broker.
However, generally favourable weather for corn production in the US so far this spring was overhanging the market.
WHEAT futures at the Chicago Board of Trade closed one to two US cents per bushel lower on Wednesday, seeing some profit taking on recent advances, analysts said. Kansas City and Minneapolis futures were six to 10 cents lower.
The large global supply situation and improving conditions for wheat crops in Russia were weighing on values as well.
Though, weakness in the US dollar index limited the downside, as it made US wheat more attractive on the export market. Worries about disease problems for US winter wheat crops were also supportive.
• Japan’s Ministry of Agriculture skipped their usual weekly food-grade wheat purchase this week, as they wanted to take a week break to transition from May to June.
• Russia could export a record large amount of wheat this year, as sales have increased significantly after the recent removal of the export tax. Rusagrotrans pegged exports at 21.5 million metric tons, beating the 2012 record of 21.3 million tons.
• Some wheat fields in Colorado are infested with Russian wheat aphids, with levels high enough to justify insecticide application, a report from Colorado State University said.
Settlement prices are in Canadian dollars per metric ton.
