By Phil Franz-Warkentin and Jade Markus, Commodity News Service
Winnipeg, June 24 – ICE Futures Canada canola contracts were stronger on Wednesday, hitting fresh highs in the new crop months as forecasts calling for more hot and dry weather across Western Canada added to concerns over the declining yield prospects in the country.
The persistent lack of moisture stressing crops in large portions of Alberta and Saskatchewan accounted for much of the buying interest, with speculators adding to long positions and commercial end users showing concern over this year’s production prospects, said traders.
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Gains in Chicago soyoil and a weaker Canadian dollar were also supportive for canola, according to participants.
However, light scale up farmer selling did temper the advances to some extent.
Ideas that canola is looking overpriced compared to other oilseeds also put some pressure on values, especially as CBOT soybeans ended the day with small losses.
About 23,015 canola contracts were traded on Wednesday, which compares with Tuesday when 26,032 contracts changed hands.
Milling wheat and durum were both untraded, but barley moved up in light commercial activity.
SOYBEAN futures at the Chicago Board of Trade closed three to six cents per bushel weaker as analysts say farmers in the Missouri area will be planting more acres, which is bearish.
Traders are looking toward an acreage report to be released by the US government on June 30 for indications on where the market is heading.
However, crop conditions in the US Midwest are poor due to excess soil moisture, which is bullish.
SOYOIL settled higher on Wednesday, following Malaysian palm oil prices.
CORN futures closed about lower on Wednesday amid good growing conditions in the Western corn belt.
Data from the USDA says 71 per cent of the corn crop was in good to excellent condition as of June 21, which is bearish.
However, reports that corn isn’t planted to the levels market watchers originally thought could provide some support for prices.
Like soybeans, corn prices are hinged on the upcoming acreage report, analysts say.
WHEAT futures in Chicago closed three to four cents per bushel lower on Wednesday, despite several bullish factors, as market watchers say wheat’s prices are not competitive on the global market.
Crops are still at risk for disease from wet weather in growing regions, particularly in the US Midwest. The USDA had said 41 per cent of winter wheat was good to excellent, as of June 21 down two percentage points.
Settlement prices are in Canadian dollars per metric ton.
