By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
May 13, 2015
Winnipeg – ICE Futures Canada canola contracts held within a narrow range for most of the day Wednesday, but managed to bounce higher within the last few minutes of trade to settle with small gains overall.
Activity was thin and choppy, with both buyers and sellers reluctant to push values too far one way or the other, according to participants.
Advances in CBOT soybeans and soyoil did provide some spillover support for canola, said traders accounting for the late day move up.
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However, a firmer tone in the Canadian dollar did limit the upside potential in canola.
Farmer selling remains relatively lackluster, as producers continue to focus on spring seeding. However, end user demand was also said to be lacking on the other side.
About 13,876 canola contracts were traded on Wednesday, which compares with Tuesday when 15,287 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
CBOT soybean futures were up one to five cents US per bushel Wednesday, seeing a short covering correction following Tuesday’s sell-off.
Some support also came from weakness in the US dollar index, as it made soybeans more attractive to foreign buyers, analysts said.
The USDA’s tighter than expected 2014/15 ending stocks estimates were also underpinning values. The USDA pegged 2014/15 ending stocks at 350 million bushels in the US, below guesses of 363 million. Global ending stocks for 2014/15 were estimated at 85.5 million metric tons, compared with expectations of 89.7 million.
However, Tuesday’s near record large production estimate of 3.85 billion bushels for the 2015/16 US soybean crop from the USDA continued to overhang the market.
SOYOIL futures moved higher Wednesday, underpinned by spreading against soymeal.
SOYMEAL futures ended slightly lower on Wednesday, undermined by spreading against soyoil, traders noted.
CORN futures in Chicago finished one to three cents higher Wednesday, finding some support from Tuesday’s tighter than expected stockpile estimates from the USDA and a weak US dollar.
Reports that some US farmers may need to reseed their corn fields, as localized regions are too wet, also underpinned values, industry watchers said.
Though, the 2015/16 US corn crop is expected to be the third largest on record, which was bearish. Good weather in most parts of the US Midwest also weighed on values.
WHEAT futures at the Chicago Board of Trade closed steady to one cent US per bushel higher Wednesday, with weakness in the US dollar providing support, brokers said. Minneapolis and Kansas City futures moved one to three cents higher.
Concerns that recent cool weather may have caused frost damage to wheat crops in the northern US Plains were also supportive.
Though, the large global supply situation and a continued lack of fresh export demand news tempered the advances. Forecasts calling for generally good weather in the US later this week were also bearish.
• Farmers in Australia are planting their crops at a faster than normal pace, as dry conditions are helping progress move along, reports say.
• The US winter wheat crop will start to be harvested in some parts of the US plains soon; farmers are just waiting for drier conditions.
• Wheat production in India could fall by up to four per cent in 2014/15, due to unfavourable rain and hailstorms in certain regions, the country’s Agriculture Ministry said.
Settlement prices are in Canadian dollars per metric ton.
