By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
Winnipeg, July 14 – ICE Futures Canada canola contracts were down on Tuesday, as speculators remained on the sell side liquidating some of their long positions.
CBOT soyoil and soybeans were both down on the day, which put some spillover pressure on canola.
Recent rainfall in parts of Western Canada added to the bearish tone, as yield prospects should show some improvement, according to participants.
However, crop conditions remain poor overall in many regions, with the moisture seen as ‘too little, too late’ to change the general expectations for tightening supplies this year.
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That production uncertainty was thought to be keeping some end user demand in the market, while also limiting farmer selling pressure, according to participants.
About 14,614 canola contracts were traded on Tuesday, which compares with Monday when 12,314 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures were steady to four cents US per bushel lower Tuesday, reacting to forecasts calling for favourable drier weather in some parts of the US Midwest later this month, analysts said.
Spillover pressure also came from the declines in corn, with profit taking on recent gains behind the softness as well.
Reports of strong competition from South America on the export market, as there’s still a lot of soybeans left to be sold from the region, further undermined values.
Though, news that crop conditions declined last week in the US limited the downside. The USDA said 62 per cent of the US crop was rated good to excellent as of Sunday, down one percentage point from the week prior.
SOYOIL futures were down sharply, as traders took profits on Monday’s gains. Spreading against soymeal was also a feature of the activity.
SOYMEAL futures were up slightly, as strong demand from the domestic livestock sector underpinned prices, market watchers said.
CORN futures in Chicago finished nine to 13 US per bushel lower Tuesday, reacting to a better than expected US crop conditions report, brokers said.
The USDA said 69 per cent of the US corn crop was in good condition as of Sunday, unchanged from the week prior. Traders expected conditions to decline by one percentage point due to excess moisture in parts of the US Midwest.
Forecasts calling for more favourable warm, dry weather later this month added to the bearish tone, as did profit taking on recent sharp gains.
WHEAT futures at the Chicago Board of Trade closed three to six cents lower Tuesday, as the large global supply situation continued to overhang the market, analysts said.
Ongoing reports that US wheat is still too expensive to compete against other countries on the export market added to the bearish tone.
Reports that the US spring wheat crop was 71 per cent good to excellent as of Sunday, up one percentage point from a week ago, further undermined values.
• The US winter wheat harvest was 65 per cent complete as of July 12, up from 55 per cent the week prior. But, down slightly from the average of 68 per cent harvested.
• Japan has issued a tender for 137,800 tonnes of food wheat that will be of US, Canadian and Australian origin, according to reports.
• Some Canadian wheat production estimates are coming in around 22 million metric tons, below the USDA’s current guess of 27 million, due to drought in many areas.
Settlement prices are in Canadian dollars per metric tonne.
