Canola falls amid harvest, water worries

Winnipeg – ICE Futures canola contracts were weaker on Wednesday, taking back all of Tuesday’s gains as losses in the Chicago soy complex weighed on values.

The looming harvest and a lack of fresh weather worries in Western Canada added to the softer tone in canola, according to participants. However, persistent concerns over heat and dryness in many areas tempered the declines, as yields likely won’t live up to earlier expectations.

Weakness in the Canadian dollar also provided some underlying support, as the currency fell by roughly half a cent relative to its United States counterpart.

About 6,787 canola contracts traded, which compares with Tuesday when 10,548 contracts changed hands. Spreading accounted for 1,316 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, with forecasts calling for some much needed rain across parts of the Midwest accounting for some of the selling pressure. Strength in the United States dollar index added to the declines as the rising currency makes U.S. exports less attractive to global buyers.

Expectations for increased soybean acreage in Brazil this year were also bearish.

However, solid crush data that beat market expectations provided some support. The U.S. monthly soybean crush came in at its second highest level on record in July, at 167.7 million bushels, according to a report from the National Oilseed Processors Association.

CORN futures were also pressured lower by the Midwestern rain forecasts, although the December contract was only down half at the closing bell.

The U.S. Department of Agriculture reported export sales of 114,000 tonnes of corn to unknown destinations this morning, and the good export demand helped keep corn within a narrow range.

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WHEAT futures were all weaker on Wednesday, with forecasts calling for rain in some dry winter wheat growing regions of the southern U.S. Plains behind some of the selling pressure as the precipitation should help moisture conditions improve ahead of seeding.

Ideas that U.S. wheat is looking expensive compared to other global sources also weighed on values.

 

OUTSIDE MARKETS

Light crude oil nearby futures in New York was down $2.03 at US$65.01 per barrel.

In the afternoon, the Canadian dollar was trading around US76.12 cents, down from 76.41 cents the previous trading day. The U.S. dollar was C$1.3138.

 

Winnipeg ICE Futures Canada dollars per tonne.

Canola Nov 18 504.10s -3.50 -0.69%

Canola Jan 19 509.70s -3.40 -0.66%

Canola Mar 19 514.60s -3.60 -0.69%

Canola May 19 518.60s -3.30 -0.63%

Canola Jul 19 520.00s -3.00 -0.57%

 

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 Sep 18 857-4s -10-6 -1.24%

Soybeans Nov 18 869-0s -10-6 -1.22%

Soybeans Jan 19 881-0s -10-6 -1.21%

Soybeans Mar 19 892-4s -9-4 -1.05%

Soybeans May 19 904-0s -8-4 -0.93%

 

Soybean Meal Sep 18 329.5s -6.3 -1.88%

Soybean Meal Oct 18 330.1s -6.5 -1.93%

Soybean Meal Dec 18 331.3s -6.5 -1.92%

 

Soybean Oil Sep 18 27.88s -0.40 -1.41%

Soybean Oil Oct 18 28.00s -0.41 -1.44%

Soybean Oil Dec 18 28.20s -0.41 -1.43%

 

Corn Sep 18 361-4s -0-6 -0.21%

Corn Dec 18 376-0s -0-4 -0.13%

Corn Mar 19 387-6s -0-2 -0.06%

Corn May 19 394-6s unch unch

Corn Jul 19 400-4s unch unch

 

Oats Sep 18 249-6s -10-4 -4.03%

Oats Dec 18 259-4s -9-0 -3.35%

Oats Mar 19 266-4s -5-4 -2.02%

Oats May 19 269-0s -4-4 -1.65%

Oats Jul 19 271-2s -4-2 -1.54%

 

Wheat Sep 18 532-2s -9-4 -1.75%

Wheat Dec 18 551-6s -9-4 -1.69%

Wheat Mar 19 574-2s -8-4 -1.46%

Wheat May 19 584-2s -8-0 -1.35%

Wheat Jul 19 578-6s -8-6 -1.49%

 

Minneapolis

Spring Wheat Sep 18 583-4s -12-6 -2.14%

Spring Wheat Dec 18 600-6s -12-4 -2.04%

Spring Wheat Mar 19 616-6s -11-6 -1.87%

Spring Wheat May 19 625-4s -9-6 -1.53%

Spring Wheat Jul 19 629-6s -8-0 -1.25%

 

Kansas City

Hard Red Wheat Sep 18 535-2s -10-4 -1.92%

Hard Red Wheat Dec 18 562-6s -9-6 -1.70%

Hard Red Wheat Mar 19 586-2s -9-0 -1.51%

Hard Red Wheat May 19 598-2s -9-2 -1.52%

Hard Red Wheat Jul 19 595-0s -9-4 -1.57%

 

Chicago livestock futures in US¢/pound, Pit trade

Live Cattle Aug 18 108.325s +0.350 +0.32%

Live Cattle Oct 18 109.000s +0.275 +0.25%

Live Cattle Dec 18 112.800s +0.375 +0.33%

 

Feeder Cattle Aug 18 149.050s +0.125 +0.08%

Feeder Cattle Sep 18 149.150s +0.475 +0.32%

Feeder Cattle Oct 18 149.275s +0.375 +0.25%

 

Lean Hogs Oct 18 52.475s +0.625 +1.21%

Lean Hogs Dec 18 49.450s +0.800 +1.64%

Lean Hogs Feb 19 56.350s +1.125 +2.04%

About the author

By Phil Franz-Warkentin Commodity News Service Canada's recent articles

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