North American Grain/Oilseed Review: Old/new crop canola spread narrows

By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada

Winnipeg, May 8 (CNS Canada) – ICE Futures Canada canola contracts settled mixed on Monday, with losses in the nearby months and a firmer tone in the more deferred positions.

The adjustments to the intermonth spreads were a feature, as investors sold July and bought November, according to participants.

Activity in the Chicago Board of Trade soy complex did little to provide direction for canola, with losses in soybeans countered by a firmer tone in soyoil.

Read Also

Canadian Financial Close: Loonie, crude oil advance

The Canadian dollar reached its highest close in nine days on Wednesday, aided by higher crude oil prices. The loonie…

Concerns over tightening old crop canola supplies remained supportive, as traders say some demand will need to be rationed going forward. Persistent weather concerns in Western Canada contributed to the gains in the new crop months, with unharvested crops from last year still sitting out in some areas and seeding delays already raising concerns over 2017 production.

About 11,903 canola contracts traded on Monday, which compares with Friday when 28,831 contracts changed hands. Spreading accounted for 4,140 of the contracts traded.

Milling wheat, durum, and barley were all untraded, although wheat prices were revised after the close.

SOYBEAN futures at the Chicago Board of Trade finished four to eight cents per bushel lower to start the week, as favourable weather in the US Midwest allowed farmers to make good seeding progress.

Weekly export inspections came in around 349,000 tonnes, which was below the analysts’ expected range of 375,000-600,000 tonnes.

However, China bumped up its imports for the month of April, compared to the same time last year, which was supportive.

SOYOIL futures finished higher on Monday.

SOYMEAL futures were lower on Monday, with spreading against soyoil a feature.

CORN futures in Chicago finished roughly four cents lower as weekly corn export inspection numbers were just 721,000 tonnes, well below industry expectations of 900,000 to 1.2 million.

Farmers made some progress in the Midwest over the weekend, despite soggy conditions in many areas, according to a report.

However, Chinese farmers are reportedly expected to plant less corn, which was supportive.

WHEAT futures in Chicago were six to eight cents weaker as strength in the US dollar and favourable weather in the US Midwest weighed on prices.

The threat of frost damage to the US wheat crop has mostly dissipated, which lent support to the market.

However, weekly wheat export inspection numbers came in at 615,000 tonnes, which was well above analysts’ estimates of 350,000-600,000 tonnes.

END

explore

Stories from our other publications