By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service
June 5, 2015
Winnipeg – ICE Futures Canada canola contracts were narrowly mixed at Friday’s close, as traders squared positions ahead of the weekend.
Canola has posted large gains over the past week, and was due for some consolidation from a chart standpoint, according to participants.
The futures briefly tested fresh highs again on Friday, but speculative profit-taking came forward to limit the upside potential. The advances were also said to be encouraging some scale-up farmer selling.
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Losses in CBOT soybeans and a stronger tone in the Canadian dollar put some further pressure on canola, although soyoil was higher in the US market.
The weather concerns that initially sparked this week’s rally in canola remained a supportive influence as well, with much of western Canada still in need of rain, said traders.
About 34,211 canola contracts were traded on Friday, which compares with Thursday when 25,988 contracts changed hands. Spreading accounted for 16,700 of the contracts traded.
Milling wheat, durum, and barley were all untraded, although prices were revised after the close.
CBOT SOYBEANS futures were eight to 10 cents US per bushel lower on Friday, undermined by profit taking on Thursday’s gains, and ahead of the weekend.
The large global oilseed supply situation and strength in the US dollar index were also overhanging the soybean market, analysts said.
Further downward pressure came from speculation that recent rains in the US Midwest will be beneficial for recently seeded soybean crops. Though, traders are also worried the rain will delay planting progress.
SOYOIL futures were stronger, as demand for vegetable oils is expected to rise in reaction to recent increased targets for biodiesel use in diesel in the United States, traders said.
SOYMEAL futures were weaker Friday, following soybeans.
CORN futures in Chicago finished one to three cents a bushel lower Friday, following the declines seen in wheat and soybeans, market watchers said.
Forecasts calling for favourable weather conditions in US corn growing regions over the next two weeks added to the bearish tone, as did the stronger US dollar.
However, steady domestic demand for corn provided some support for prices, as did worries that some corn acres won’t get seeded in the US due to wet weather this week.
WHEAT futures at the Chicago Board of Trade closed six to 12 cents lower as traders took profits on recent advances, brokers said.
Some of the losses were also linked to strength in the US dollar, as it made US wheat supplies even less attractive to foreign buyers.
However, worries about excess moisture causing quality problems for the US winter wheat crop limited the losses. Traders are also concerned about persistent dry weather in Russia and Western Canada.
• Ethiopia is tendering to buy 400,000 metric tons of milling wheat, and Iraq is expected to make a purchase over the weekend, according to reports.
• Wet weather is hindering harvest progress in parts of Texas in the United States. Fields where it’s firm enough to combine are showing low yields and test weights, reports say.
• Russia will be launching a new export tax on wheat as of July 1, to slow exports amid a weak rouble, the country’s currency. Russian officials say they don’t plan to change the tax, which is at 50 per cent of the customs price per tonne, minus 5,500 roubles.
Settlement prices are in Canadian dollars per metric ton.
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