By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, June 9 – The ICE Futures Canada canola market finished weaker Tuesday, as forecasts calling for rain on the western Prairies later this week weighed on the market.
The stronger Canadian dollar, relative to its US counterpart, was also bearish for values as it made canola less attractive on the international market.
US soyoil was weaker which contributed to the declines.
Traders were also positioning themselves ahead of Wednesday’s crop supply and demand report by the USDA.
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However, gains in US soybeans and soymeal limited the losses.
While some portions of the Prairies are suffering from a lack of moisture, certain regions of Manitoba likely have too much.
Around 21,578 canola contracts were traded on Tuesday, which compares with Monday when 27,781 contracts changed hands. Spreading accounted for 13,740 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were up by 3 to 7 cents per bushel on Tuesday, as concerns over seeding delays in parts of the Midwest provided support.
The USDA rated the country’s soybean crop at 69% good-to-excellent in its latest weekly report, which was slightly below market expectations. The seeding pace was also behind the average for this time of year, at 79% complete.
With more rainfall in the forecasts, there are ideas that some intended soybean area may be left unseeded this year, which was supportive for prices. Spreading against corn was also a feature of the activity, with some participants reported to be buying soybeans and selling corn.
SOYOIL settled lower on Tuesday, with adjustments to the oil/meal spreads behind some of the selling pressure.
SOYMEAL futures settled higher on Tuesday.
CORN futures in Chicago settled near unchanged on Tuesday, posting losses of less than a penny per bushel in all of the most active contracts.
Conditions remain relatively favourable for the US corn crop, which was rated at 74% good-to-excellent for the third week in a row in the latest USDA report.
Large corn supplies in China are expected to cut into the demand from that country, which also weighed on prices. However, spillover from the advances in wheat did provide some underlying support.
WHEAT futures in Chicago were up by 4 to 6 cents per bushel on Tuesday, hitting their highest levels in two months amid ongoing concerns over the state of the US winter wheat crop.
The good-to-excellent rating of the US crop dipped one percentage point, to 43%, in the latest USDA report. Harvest operations were also running behind, with only four percent of the US winter wheat crop in the bin to date. That compares with the average of 12% done.
Weather concerns in other wheat growing regions of the world, including Europe and Russia, were also supportive.
Chart-based buying contributed to the advances, with some stops hit on the way up.
– The US spring wheat crop was 97% emerged as of June 7, which compares with the five-year average of 80%. The crop was rated as 69% good-to-excellent, which compares with 71% in that category at the same point the previous year.
– The USDA releases its monthly supply/demand report on Wednesday, and average trade estimates are calling for slight upward revisions to the US wheat ending stocks numbers for both 2014/15 and 2015/16.
