By Phil Franz-Warkentin and Brandon Logan, Commodity News Service Canada
Jan. 29, 2014
Winnipeg – ICE Futures Canada canola contracts settled lower on Wednesday, taking some direction from the downturn in the CBOT soy complex.
While canola had traded to both sides of unchanged earlier in the session, large losses in CBOT soybeans and soyoil were enough to pull the Canadian futures lower as the day progressed, according to participants.
Canada’s record large crop and the ongoing logistical issues across the Prairies remained a bearish influence as well, said traders.
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However, ideas that canola is oversold and cheap compared to most other oilseeds did provide some underlying support. The continued weakness in the Canadian dollar, which remained below 90 US cents today, also tempered the declines. The weaker currency was said to be helping keep crush margins at record highs.
About 20,813 canola contracts were traded on Wednesday, which compares with Tuesday when 17,118 contracts changed hands. Spreading accounted for 8,774 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following yesterday’s close.
US Grain And Oilseed Review
SOYBEAN futures closed 14 to 16 US cents per bushel weaker on Wednesday, undermined by reports that South America’s soybean harvest is underway, market watchers said.
Expectations that Brazil will harvest a record large crop due to good growing conditions also weighed on values, as there are already ample soybean supplies globally.
Further concerns that China could start cancelling US soybean shipments in the near-term and shift demand to Brazilian beans were bearish.
SOYOIL futures were 30 to 31 points lower on Wednesday, undermined by spillover from the losses seen in the soybean market, analysts said.
SOYMEAL futures were US$4.20 to US$5.30 weaker on Wednesday, undermined by spillover from the losses seen by soybeans, brokers said.
CORN futures closed two to four US cents per bushel weaker on Wednesday, as prices continued to trade in a narrow range, participants said.
Favourable weather forecasts for corn crop development in South America were bearish, as was spillover from the losses seen in the wheat and soybean markets.
However, good export demand limited any further losses, as the USDA reported that exporters sold 110,000 metric tonnes of US corn to Spain on Tuesday.
CBOT WHEAT, MGEX SPRING WHEAT and KCBT RED WHEAT futures closed seven to 16 US cents per bushel weaker on Wednesday, falling to a three-and-a-half year low amid high global carryover stocks, industry watchers said.
Adding to the bearish tone were favourable weather conditions for the US winter wheat crop.
According to Commodity Weather Group, the US Midwest is expected to see snowfall during the weekend, which will help protect crops in the region from cold weather conditions.
Ideas that global demand for wheat is relatively light also created some downward pressure on values, as did reports that other global wheat prices are cheaper in comparison to US values, brokers said.
Daily World Wheat News
* According to Commodity Weather Group, 5% of the US winter wheat crop has been damaged due to the cold conditions seen earlier in the week.
* Egypt’s supply and internal trade minister said stocks of wheat will meet the country’s needs until May 18.
* The Grain Silos and Flour Mills Organisation in Saudi Arabic said it purchased 715,000 tonnes of wheat from Australia, Europe, and the US.
Settlement prices are in Canadian dollars per metric ton.
