By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
October 15, 2014
Winnipeg – ICE Futures Canada canola market bounced around within a narrow range for most of the day on Wednesday, but climbed out of that range in the final minutes to settle near the highs of the session.
CBOT soybeans were also range-bound for most of the session, but moved to their lows of the day by the close. Soyoil was also down. The record large US crop prospects remain a bearish influence overhanging the oilseeds in general, according to participants.
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Favourable harvest weather across most of Western Canada, and increasing farmer selling, put some additional pressure on the canola market.
However, the nearby technical bias has shifted higher, and some of the late strength in canola was tied to speculative short covering. Recent weakness in the Canadian dollar, which is trading at its weakest levels in five years relative to its US counterpart, provided further support as the softer currency helps crush margins and makes exports more attractive.
About 27,410 canola contracts were traded on Wednesday, which compares with Tuesday when 37,417 contracts changed hands. The July/November spread was a feature as participants were rolling positions out of the front month.
Milling wheat and durum were both untraded, but barley actually saw some activity today and moved up in the December contract.
Soybean futures in Chicago corrected 11 to 12 cents per bushel lower Wednesday after rallying to their highest point since mid-September a day earlier. Values temporarily soared to US$9.78 a bushel in the November contract on Wednesday before traders took profits.
From a technical standpoint the bias is pointed downward.
After several days of rain, dry weather is forecast to move into the US Midwest which was bearish for values as it should allow farmers time to complete the bulk of the harvest. The US soybean harvest is 40 percent complete, which is below the five-year average of 53 percent.
Dry conditions in Brazil limited the losses.
SOYOIL futures were lower on Wednesday, following soybeans.
SOYMEAL futures corrected lower.
CORN futures in Chicago fell nine cents per bushel lower Wednesday, pressured by forecasts calling for dry weather to move into the US Midwest.
Corn hit a five-week high on Tuesday. However, expectations of a record harvest this season continued to weigh on values and curbed upward action.
Limited storage capacity for corn is bearish right now as the harvest is just 24 percent complete and there are reports of corn piles sitting on some fields.
WHEAT futures in Chicago ended three to five cents per bushel lower after reaching a one-month high on Tuesday. Advances in winter wheat planting were bearish for values.
Dry conditions are expected to help planting efforts over the next 10 days which was also bearish.
– China’s agriculture minister is warning the country will be unable to sustain the current level of grain imports in the future and more domestic grain production should be encouraged.
– The United Kingdom says it may start using wheat for ethanol production, depending on profitability issues, according to a report.
– Meridian Seeds has officially unveiled a new type of hard red winter wheat to the US, one that promises to be resistant to fusarium.
Settlement prices are in Canadian dollars per metric ton.
