Winnipeg (CNS Canada) – ICE Futures Canada canola contracts were stronger on Wednesday, as an escalating trade dispute between China and the United States could open the door for more Canadian business.
Responding to U.S. threats, China announced proposed tariffs of its own on a wide range of U.S. imports overnight – including soybeans. While the resulting selloff in Chicago Board of Trade soybeans initially spilled into the canola market, the Canadian oilseed managed to turn higher amid ideas that the spat could create export opportunities elsewhere.
Read Also
U.S. grains: Soy drops on demand worries, corn firm as traders question lofty yield projections
U.S. soybean futures fell to a 1-1/2 week low on Tuesday as China continued to shun purchases from the United States and as forecasts for improved rains in the coming days reinforced expectations for a sizeable Midwest harvest.
China is already thought to be looking for alternatives to U.S. soybeans, with canola basis levels in Vancouver reportedly rising to C$60 above the futures from C$40 on Tuesday.
However, large old crop supplies and expectations for increased acres this spring did put some pressure on values. The Canadian dollar was also a bit firmer on the day.
About 39,372 canola contracts traded on Wednesday, which compares with Tuesday when 20,904 contracts changed hands. Spreading accounted for 24,958 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were down sharply on Wednesday, as the markets reacted to proposed Chinese retaliatory tariffs on US$50 billion worth of U.S. goods.
While the tariffs are not yet in place, the threat was enough to spark the heavy losses in soybeans seen today, with some stops likely hit on the way down.
However, soybeans did manage to settle well off of their session lows, as the market uncovered some support.
Declining production estimates out of Argentina and the smaller-than-expected soybean acres in last week’s USDA prospective plantings report also remained supportive.
CORN futures were also pressured lower by the trade dispute, as China is a major buyer of U.S. corn.
Beyond the trade issues, seeding is in its early stages in the southern U.S., while cooler weather to the north may delay some corn planting.
WHEAT futures ended mixed, with small gains in Kansas City hard red winter wheat and losses in the other markets.
Spillover from the declines in corn and soybeans accounted for some of the selling pressure, as wheat also reacted to the Chinese trade war.
However, concerns over cooler-than-normal temperatures across a large portion of the U.S. winter wheat region provided underlying support, especially as conditions are already poor in many areas.
OUTSIDE MARKETS
Light crude oil nearby futures in New York were US$63.40 per barrel.
In the afternoon, the Canadian dollar was trading around US 78.29 cents up from, down from 77.43 cents the previous trading day. The U.S. dollar was C$1.22773.
Winnipeg ICE Futures Canada dollars per tonne.
Canola May 18 528.40s +1.90 +0.36%
Canola Jul 18 533.80s +1.80 +0.34%
Canola Nov 18 521.50s +2.00 +0.38%
Canola Jan 19 524.50s +1.70 +0.33%
Canola Mar 19 525.40s +1.50 +0.29%
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 May 18 1015-2s -22-6 -2.19%
Soybeans Jul 18 1026-4s -22-6 -2.17%
Soybeans Aug 18 1028-6s -22-6 -2.16%
Soybeans Sep 18 1022-6s -22-6 -2.18%
Soybeans Nov 18 1019-0s -23-2 -2.23%
Soybean Meal May 18 381.8s +1.8 +0.47%
Soybean Meal Jul 18 384.9s +1.6 +0.42%
Soybean Meal Aug 18 381.8s +0.9 +0.24%
Soybean Oil May 18 31.68s -0.66 -2.04%
Soybean Oil Jul 18 31.96s -0.66 -2.02%
Soybean Oil Aug 18 32.08s -0.67 -2.05%
Corn May 18 381-0s -7-4 -1.93%
Corn Jul 18 389-6s -7-4 -1.89%
Corn Sep 18 396-6s -7-4 -1.86%
Corn Dec 18 405-0s -7-2 -1.76%
Corn Mar 19 412-2s -6-6 -1.61%
Oats May 18 230-0s -2-4 -1.08%
Oats Jul 18 237-6s -2-4 -1.04%
Oats Sep 18 242-4s -2-6 -1.12%
Oats Dec 18 250-6s -1-4 -0.59%
Oats Mar 19 256-6s -1-4 -0.58%
Wheat May 18 455-6s -1-6 -0.38%
Wheat Jul 18 473-0s -1-0 -0.21%
Wheat Sep 18 490-0s -0-6 -0.15%
Wheat Dec 18 512-2s -0-2 -0.05%
Wheat Mar 19 529-0s +0-6 +0.14%
MINNEAPOLIS
Spring Wheat May 18 576-6s -6-2 -1.07%
Spring Wheat Jul 18 587-2s -5-0 -0.84%
Spring Wheat Sep 18 595-0s -3-6 -0.63%
Spring Wheat Dec 18 607-4s -4-2 -0.69%
Spring Wheat Mar 19 619-6s -4-0 -0.64%
KANSAS CITY
Hard Red Wheat May 18 486-0s +1-2 +0.26%
Hard Red Wheat Jul 18 504-2s +1-0 +0.20%
Hard Red Wheat Sep 18 522-6s +1-0 +0.19%
Hard Red Wheat Dec 18 546-2s +0-6 +0.14%
Hard Red Wheat Mar 19 560-6s +0-4 +0.09%
Chicago livestock futures in US¢/pound, Pit trade
Live Cattle (Pit) Apr 18 113.025s +1.050 +0.94%
Live Cattle (Pit) Jun 18 102.325s +2.700 +2.71%
Live Cattle (Pit) Aug 18 102.600s +2.700 +2.70%
Feeder Cattle (Pit) Apr 18 134.500s +3.975 +3.05%
Feeder Cattle (Pit) May 18 135.125s +4.150 +3.17%
Feeder Cattle (Pit) Aug 18 140.225s +3.050 +2.22%
Lean Hogs (Pit) Apr 18 53.075s +1.400 +2.71%
Lean Hogs (Pit) May 18 62.875s +1.675 +2.74%
Lean Hogs (Pit) Jun 18 73.275s +1.625 +2.27%
