By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, June 16 – Canola contracts on the ICE Futures Canada trading platform ended sharply stronger on Tuesday, taking direction from the stronger Chicago soybean market.
Values were also underpinned by ongoing worries about production problems in Western Canada. While some of the dry regions got relief over the weekend, more widespread, heavy rains are still needed to turn things around, a broker said.
Chart-based buying and concerns about planting delays for US soybean crops added to the bullish tone.
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However, global oilseed supplies remain very large, which was overhanging the market.
Ideas that soybean crops that have been seeded in the US will have good yields due to recent rain were also bearish.
About 26,530 contracts traded on Tuesday, which compares with Monday when 36,241 contracts changed hands. Spreading accounted for 17,798 of the trades.
Milling wheat and durum futures were untraded, though the Exchange moved wheat prices higher after Tuesday’s close.
Barley saw 25 contracts traded in the July future at a stronger price.
SOYBEANS jumped 15 to 23 cents per bushel higher on Tuesday, thanks to the USDA’s weekly report which lowered its rating for the US crop.
According to the USDA, just 67 per cent of the crop was in either good or excellent condition as of Sunday, down from 69 per cent the week prior. The report also said 87 per cent of soybeans were planted, behind the five-year average of 90 per cent.
Heavy rain in Kansas, Missouri and other portions of the US Southern Plains has hurt planting efforts, which was bullish for prices. There is speculation US farmers in certain areas may abandon plans to seed some fields with soybeans, due to the excess rain.
SOYOIL futures in Chicago ended 21 to 29 points higher on the day, taking direction from stronger soybean and Malaysian palm oil markets.
SOYMEAL futures finished higher, following soybeans.
CORN futures on the Chicago Board of Trade corrected four to seven cents per bushel higher Tuesday, after hitting an eight-month low during the previous session.
The ratings for corn in the US dropped a percentage point in the latest weekly report compiled by the USDA, which was supportive. The agency now says about 73% of the crop is in good or excellent condition.
News of a fresh export sale of old crop US corn and spillover buying from soybeans added to the bullish tone.
Though, the Brazilian corn crop is estimated to be 2.5 million metric tonnes bigger in a private analyst’s recent report. The jump is due to an increase in second crop acreage.
Chicago wheat futures ended slightly lower after bouncing around both sides of unchanged on Tuesday. The large global supply situation and a continued lack of fresh export demand contributed to the losses.
However, heavy rain in the US Southern Plains has raised concerns about the quality of the crop, which underpinned the market, analysts said.
Crop-watchers also note the increased moisture is ratcheting up the potential for disease pressures along with reduced yields.
Western and southern Russia are dry right now which is stressing spring and winter grains, according to a report.
• Russian wheat exports have doubled since the country abolished export duties on wheat, according to a report.
• In 2013/2014 Romania exported over 5.1 million tonnes of wheat, analysts said. That was much higher than the previous season when just 2.8 million tonnes was exported.
• Egypt is reportedly moving forward with a food security program designed to save the country US$200 million a year.
