By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, June 18 – Canola contracts on the ICE Futures Canada trading platform ended lower on Thursday, undermined by profit taking on a recent rally.
A sell-off seen in Chicago soyoil futures also spilled over to weigh on the Canadian oilseed, according to analysts.
A lack of buying interest from domestic crushers, as margins have deteriorated to multi-year lows, added to the bearish tone.
Forecasts are also calling for beneficial rain in some of the drought-stricken regions of Western Canada. Though, some traders believe it won’t be able to erase the damage that’s already been done.
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Worries about excess moisture harming US soybean production were limiting the losses, as were reports of very cold weather in parts of Manitoba and Saskatchewan overnight. Temperatures fell to 0 degrees Celsius in some regions, which likely didn’t cause much damage to canola crops, but is slowing crop development.
About 20,011 contracts traded on Thursday, which compares with Wednesday when 29,102 contracts changed hands. Spreading accounted for 14,862 of the trades.
Milling wheat, durum and barley futures were all untraded. Though, the Exchange moved wheat prices lower following Thursday’s close.
SOYBEANS rose one to nine cents US per bushel on Thursday, as traders continued to cover shorts while more reports of water damage and ruined planting efforts streamed in from the Midwestern US.
Analysts say farmers in water-logged states like Kansas and Missouri may abandon plans to plant soybeans due to the excess moisture. Build-ups of dirt or mud on soybean plants can block photosynthesis and delay an entire crop’s development, according to a report.
Weakness in the US dollar also supported prices, as it made US soybeans more attractive to foreign buyers.
SOYOIL futures in Chicago ended sharply lower on the day, following weakness in outside vegetable oil markets.
SOYMEAL futures finished higher following soybeans.
CORN futures on the Chicago Board of Trade ticked slightly lower Thursday, as farmers sold supplies to take advantage of recent ‘reasonably’ high prices, traders said.
Crops in the Midwest need warm, dry weather soon, say analysts. More rain is forecast through the remainder of the week but some sunny periods may occur during the weekend.
The July contract is finding resistance right below the US$3.60 a bushel level, according to an analyst.
Wheat futures on the Chicago Board of Trade were down two to four cents per bushel Thursday, as traders exited short positions.
Scattered showers throughout parts of Western Canada, which is suffering from extreme dryness in certain areas, were beneficial for the crop which added to the bearish tone.
However, there are ideas that the hard-red winter wheat crop in the US Southern Plains is of low quality due to recent excess moisture problems.
• Russian grain stocks in 2015 (to the beginning of June) totaled 14.6 million tons, which is 3.1 million tonnes or 26.2% more than June 1, 2014, according to a report.
• Three large Egyptian firms are reportedly joining forces to establish 23 grain handling facilities in the country.
• The Taiwan Flour Millers’ Association has purchased 97,000 tonnes of wheat from the US, traders say.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
