By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service
June 1, 2015
Winnipeg – ICE Futures Canada canola contracts were sharply stronger on Monday, hitting fresh highs in the process as speculative and commercial buying interest built on itself.
Spillover from the advances in CBOT soyoil accounted for some of the buying interest in canola, as traders continued to react to Friday’s new biodiesel targets from the US Environmental Protection Agency.
Adding to the strength in canola was a frost event that hit an estimated 10 percent of canola area across the Canadian Prairies over the weekend. While the extent of the damage is still being determined, early reports are pointing to an extensive need for reseeding.
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However, CBOT soybeans were slightly weaker and the great US production prospects did serve to temper the upside potential in canola. Profit-taking at the close also put some pressure on values late in the day.
About 57,097 canola contracts were traded on Monday, which compares with Friday when 27,504 contracts changed hands.
Milling wheat, durum, and barley were all untraded, although wheat futures were revised higher after the close.
Settlement prices are in Canadian dollars per metric ton.
Price Change
Canola Jul 485.30 up 12.30
Nov 481.30 up 15.70
Jan 479.40 up 15.00
Milling Wheat Jul 210.00 up 5.00
Oct 212.00 up 5.00
Durum Jul 298.00 unch
Oct 298.00 unch
Barley Jul 191.00 unch
CBOT SOYBEAN futures were two to eight cents US per bushel softer on Monday, reacting to forecasts calling for beneficial weather in US soybean growing regions this week.
Further downward pressure came from reports that labour disputes are calming down in Argentina, brokers said.
The large global supply situation and a strong US dollar index were also overhanging the soybean market.
Though, a sharp rally in soyoil futures limited the downside, as did steady demand for US soybeans.
SOYOIL futures moved sharply higher on follow-through buying Monday, traders said. Friday’s EPA announcement was also supportive, as they proposed to raise biodiesel requirements in diesel.
SOYMEAL futures ended sharply lower, with spreading against soyoil a feature of the activity, according to market watchers.
CORN futures in Chicago finished steady to one cent per bushel higher on Monday, lifted by spillover buying from wheat, traders said.
News that South Africa’s corn crop will be smaller than the year prior because of drought in many growing regions further underpinned prices.
Though, worries about slowing demand after the US EPA proposed to lower ethanol requirements in gasoline helped to limit the advances.
Generally good weather for the US corn crop and expectations that the USDA weekly crop progress report will show 75 per cent of fields are in good to excellent condition later Monday were also bearish.
WHEAT futures at the Chicago Board of Trade closed 15 to 17 cents US per bushel stronger on Monday, underpinned by speculative short covering, analysts said.
Reports that cool weather in Western Canada may have caused damage to some spring wheat crops added to the bullish tone, as did talk that Tunisia may import more wheat this year due to drought in the country.
Concerns about recent moisture causing quality problems for the US winter wheat crop were also supportive.
However, improving weather conditions for US and Russian wheat crops limited the gains, as did strength in the US dollar and the large global supply situation.
• Germany, Lithuania, and Latvia exported €50 million of wheat to Iran during the first quarter of 2015, Eurostat said.
• According to reports from an Oregon State University official, the disease sharp eyespot is infecting wheat in the Willamette Valley region of the state.
