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North American Grain/Oilseed Review: Canola drops with soyoil

By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada

Winnipeg, May 10 (CNS Canada) – ICE Futures Canada canola contracts were weaker on Wednesday, with the largest losses in the nearby July contract as the old/new crop spread narrowed in.

Soybeans and soyoil at the Chicago Board of Trade had a bearish response to monthly supply/demand data released by the US Department of Agriculture, with rising world soybean supply estimates behind some of the selling that spilled into canola.

Strength in the Canadian dollar, which moved back above 73 US cents, added to the softer tone in canola with speculative selling a feature.

Relatively favourable weather conditions for spring seeding across most of Western Canada also weighed on prices. However, the forecasts turn wetter later in the week for Alberta and parts of Saskatchewan, which kept some weather premiums in the market.

Tightening old crop supplies remained supportive as well, as the market will need to ration some demand going forward, according to analysts.

About 14,834 canola contracts traded on Wednesday, which compares with Tuesday when 11,955 contracts changed hands. Spreading accounted for 6,322 of the contracts traded.

Milling wheat, durum, and barley were all untraded, although wheat prices were revised after the close.

SOYBEAN futures at the Chicago Board of Trade finished a quarter of a cent to three cents per bushel lower in the wake of the USDA’s World Agricultural Supply and Demand Estimates. The agency pegged US stockpiles in 2017/18 at 480 million bushels, well below analysts’ expectations of 572 million. This initially sent prices soaring but traders quickly took profits, pushing the market lower.

There are growing ideas that some corn acres could get swapped out in favour of soybeans due to persistent rain in the US, which was bearish.

On the other side of the market, the USDA lowered its estimate for soybean production in 2016/17, which helped to limit the losses.

SOYOIL futures finished lower on Wednesday.

SOYMEAL futures were also lower.

CORN futures in Chicago finished five to seven cents higher after the USDA pegged stockpiles at a lower-than-expected number. The agency predicted supplies in 2017/18 would hit 2.11 billion bushels, which was less than the previous estimate of 2.295 billion.

More rain is expected to fall tonight in Missouri, Indiana and Illinois, which will delay planting efforts and potentially encourage more farmers to switch some acres to soybeans.

Some large funds have dumped their short positions, according to Scott Capinegro of Barrington Commodity Brokers in Illinois.

WHEAT futures in Chicago finished two cents higher as season-ending stocks in 2017/18 were pegged at 914 million bushels, which compares to this year’s number of 1.159 billion.

Speculative buying was a feature of the day as some investors staked positions right before the close.

Poor weather in the US Midwest was also supportive for wheat prices.

Commodity Future Prices

2017-05-10 13:19
Price Change

Prices are in Canadian dollars per metric ton


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