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Canola drops as premium disappears

Winnipeg (CNS Canada) – ICE Futures Canada canola contracts were weaker on Thursday, with the largest losses in the old crop July contract as participants bailed out of the front month.

July canola started the day trading at a premium of about C$11 to November, but settled at even money. With ample old crop supplies and expectations for a large crop this year, a trader said there was little reason for old crop canola to still be trading at a premium to the new crop.

Strength in the Canadian dollar, which was up by about half a cent relative to its United States counterpart, contributed to the softer tone in canola.

Forecasts calling for some much needed rain in dry areas of Western Canada were also bearish. However, there are still plenty of areas of concern across the Prairies.

Statistics Canada and the U.S. Department of Agriculture both release acreage estimates on Friday, and positioning ahead of the reports accounted for some of the activity.

About 26,828 canola contracts traded, which compares with Wednesday when 28,670 contracts changed hands. Spreading was a feature, accounting for 23,560 of the contracts traded.

SOYBEAN futures ended lower on Thursday after trading to both sides of unchanged, as traders adjusted positions ahead of Friday’s United States Department of Agriculture acreage and quarterly stocks reports.

Average pre-report guesses are for an increase in U.S. soybean seedings by about a million acres from the earlier estimate, with quarterly stocks also up from the year-ago level.

Weekly U.S. soybean export sales of about 360,000 tonnes for old crop were at the lower end of trade expectations. However, new crop business topped trade guesses at about 640,000 tonnes.

While crop conditions remain reasonably favourable across the Midwest, some areas are starting to look too wet, with more moisture in the forecasts.

CORN ended lower on the day, with pre-report positioning the feature as traders expect to see large stocks and an upward revision to U.S. corn acres.

Weekly U.S. corn export sales of about 850,000 tonnes for old crop and 630,000 tonnes for new crop came in at the higher end of trade guesses, providing some support.

WHEAT futures were mixed, with losses in the winter wheats and a firmer tone in Minneapolis spring wheat.

Seasonal harvest pressure, improving spring wheat crop conditions, and bearish technical signals all weighed on wheat. Although, weather concerns in some wheat growing regions of the world provided some support.

Weekly U.S. wheat export sales topped trade expectations at 563,700 tonnes, helping limit the losses.

OUTSIDE MARKETS

Light crude oil nearby futures in New York was up 69 cents at US$73.45 per barrel.

In the afternoon, the Canadian dollar was trading around US75.44 cents, up from 74.80 cents the previous trading day. The U.S. dollar was C$1.3256.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola Jul 18  510.40s  -13.30  -2.54%

Canola Nov 18  510.40s  -2.50  -0.49%

Canola Jan 19  516.20s  -2.10  -0.41%

Canola Mar 19  519.00s  -1.50  -0.29%

Canola May 19  520.40s  -1.70  -0.33%

 

American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound. Prices are displayed with fractions (2/8, 4/8, and 6/8) instead of decimals. -2 equals .25, -4 equals .50, -6 equals .75. The “s” means it is the settlement.

 

Chicago

Soybeans Jul 18  861-2s  -6-2  -0.72%

Soybeans Aug 18  866-6s  -6-2  -0.72%

Soybeans Sep 18  872-4s  -6-0  -0.68%

Soybeans Nov 18  883-4s  -5-4  -0.62%

Soybeans Jan 19  892-4s  -5-4  -0.61%

 

Soybean Meal Jul 18  331.4s  -2.5  -0.75%

Soybean Meal Aug 18  330.7s  -1.6  -0.48%

Soybean Meal Sep 18  331.1s  -0.9  -0.27%

 

Soybean Oil Jul 18  29.01s  unch  unch

Soybean Oil Aug 18  29.13s  unch  unch

Soybean Oil Sep 18  29.25s  unch  unch

 

Corn Jul 18  345-0s  -7-4  -2.13%

Corn Sep 18  354-2s  -7-4  -2.07%

Corn Dec 18  366-0s  -7-2  -1.94%

Corn Mar 19  375-6s  -7-0  -1.83%

Corn May 19  382-2s  -7-2  -1.86%

 

Oats Jul 18  243-0s  -11-0  -4.33%

Oats Sep 18  237-4s  -3-2  -1.35%

Oats Dec 18  237-4s  -7-2  -2.96%

Oats Mar 19  241-4s  -7-2  -2.91%

Oats May 19  243-6s  -7-2  -2.89%

 

Wheat Jul 18  479-4s  unch  unch

Wheat Sep 18  483-4s  -5-0  -1.02%

Wheat Dec 18  499-4s  -4-2  -0.84%

Wheat Mar 19  515-2s  -4-0  -0.77%

Wheat May 19  527-0s  -3-6  -0.71%

 

Minneapolis

Spring Wheat Jul 18  521-4s  -5-4  -1.04%

Spring Wheat Sep 18  537-4s  -3-6  -0.69%

Spring Wheat Dec 18  555-2s  -2-0  -0.36%

Spring Wheat Mar 19  571-0s  -2-0  -0.35%

Spring Wheat May 19  581-2s  -1-6  -0.30%

 

Kansas City

Hard Red Wheat Jul 18  453-2s  -7-0  -1.52%

Hard Red Wheat Sep 18  472-0s  -6-2  -1.31%

Hard Red Wheat Dec 18  495-4s  -6-0  -1.20%

Hard Red Wheat Mar 19  514-4s  -5-2  -1.01%

Hard Red Wheat May 19  527-0s  -5-4  -1.03%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Jun 18  108.200s  +1.175  +1.10%

Live Cattle Aug 18  103.725s  +1.000  +0.97%

Live Cattle Oct 18  107.025s  +0.875  +0.82%

 

Feeder Cattle Aug 18  146.825s  +1.050  +0.72%

Feeder Cattle Sep 18  147.375s  +0.900  +0.61%

Feeder Cattle Oct 18  147.275s  +0.800  +0.55%

 

Lean Hogs Jul 18  81.125s  +0.900  +1.12%

Lean Hogs Aug 18  75.725s  +0.675  +0.90%

Lean Hogs Oct 18  61.425s  +0.125  +0.20%

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