By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, June 9 – ICE Futures Canada canola contracts ended mixed on Monday, following a day of quiet, choppy activity. The July contract saw the only losses as traders moved out of their July positions and into November, analysts said.
Ideas that growing conditions for North American oilseed crops are generally favourable so far this spring weighed on the market, as did the upswing in the value of the Canadian dollar.
The canola market’s bearish technical bias and the large Canadian canola supply situation further undermined prices.
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On the other side, continued slow farmer selling, as they focus on spring fieldwork, helped to limit the declines.
Some spillover support also came from the gains seen in outside oilseeds, including Chicago soybeans and soyoil.
The need to keep a weather premium built into prices, as there are still worries about seeding delays in some parts of Manitoba and Saskatchewan, kept a firm floor under the market.
About 12,428 canola contracts were traded on Monday, which compares with Friday when 15,168 contracts changed hands. Spreading accounted for 7,546 of the contracts traded.
Milling wheat, durum and barley futures were untraded, though the Exchange moved some prices lower after the close on Monday.
CORN futures in Chicago ended at their lowest price level in three months Monday, between four to eight cents per bushel lower, on news China would no longer be issuing permits to import dried distiller grains (DDGs).
DDGs are the meal that is left over after corn is transformed into ethanol. Exports of it had jumped to more than 8 million metric tonnes last year. Of that amount, China accounted for 34% of the export market, according to the US Grains Council.
The news comes as US corn production is on the rise amid favourable weather conditions. The US Midwest has received twice the normal amount of rain in the past month, according to the National Weather Service.
SOYBEAN futures at the Chicago Board of Trade were mixed on Monday as speculation mounted that existing inventories of soybeans, which are at their lowest level in a decade, will get eaten up through global demand. This gave long-term contracts the support they needed while the short-term values encountered more resistance.
The latest crop report, due to be released after Monday’s close, is expected to show that bean planting is over 90% complete and near the five-year average.
The old crop carryover was at 130 million bushels on the May report and the average trade guess is 127 million bushels, according to a report.
SOYOIL futures were slightly higher on Monday.
SOYMEAL futures were mixed, following soybeans.
WHEAT futures in Chicago were five cents per bushel lower on speculation that traders liquidated contracts in the wake of Friday’s 2.4% increase. More rain fell in the southern Great Plains last week, assisting crops that are close to harvest, which added more pressure.
Dry weather in China’s Northern Plain has improved prospects for wheat harvest in that country.
Crop conditions for winter wheat should be stable, with progress near the five-year average, according to a report.
Spillover pressure from corn was also bearish for prices.
• World wheat production for 2014/15 may be down by 2 per cent with yields retreating from high levels, while consumption may rise by 1 per cent through gains in food and feed use, said analysts.
• Kazakhstan increased wheat and muslin (wheat and rye mixture) exports by 39.3 percent in the first quarter of 2014 compared to the same period of 2013, according to the country’s main statistics agency.
• In Germany’s cash market, standard new crop wheat for September delivery in Hamburg was offered for sale unchanged at 4 Euros over the Paris November contract.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
