By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 21 – THE ICE Futures Canada canola market ended higher on Tuesday, as gains in the US soy complex lent strength to canola prices.
Malaysian palm oil and European rapeseed futures were also stronger which supported canola.
A lack of farmer trading also contributed to the advances as well as speculation the 2015/16 crop will be smaller than last year.
However, the Canadian dollar was higher relative to its US counterpart which made canola less attractive on the international market.
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One analyst said turmoil in Chinese economic affairs was also having a negative pull on canola.
“The correction in China’s stock market has had a ripple effect in the commodity world. China has slowed down on their purchases and soybean new crop business is very slow,” he noted.
Around 9,938 canola contracts were traded on Tuesday, which compares with Monday when around 10,135 contracts changed hands.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were up by three to 11 cents per bushel on Tuesday, seeing a modest correction following Monday’s losses.
Solid export demand contributed to the turn higher in beans, as the USDA reported a fresh 110,000 tonne sale to ‘unknown destinations’ this morning.
In other export news, it was reported that China imported 8.09 million tonnes of soybeans in June, which was the second largest monthly total for the country ever. The majority of those beans came from Brazil.
The US soybean crop was rated at 62% good-to-excellent in the latest weekly USDA report, which was unchanged from the previous week.
SOYOIL settled higher on Tuesday, following beans.
SOYMEAL futures were up on Tuesday.
CORN futures in Chicago were up by 1 to 2 cents per bushel on Tuesday, as the market saw some consolidation following recent losses.
After hitting their weakest levels of the past month on Monday, corn was looking oversold and due for a correction from a chart standpoint, according to participants.
Solid Chinese demand for corn-based US DDGS contributed to the firmer tone in corn, according to participants.
The USDA also left its weekly crop ratings unchanged at 69% good-to-excellent, which was somewhat supportive as most participants had expected to see an improvement on the week.
WHEAT futures in Chicago were down by four to 10 cents per bushel on Tuesday, as US wheat remains uncompetitive in the global market. Minneapolis futures were down one to two cents, while Kansas City wheat futures were down seven to eight cents.
The advancing US winter wheat harvest and improvements to wheat crops elsewhere in the world added to the bearish tone, said traders.
– Egypt announced a tender for the purchase of 55,000 to 60,000 tonnes of soft wheat, for delivery in September.
– El Nino conditions in the Pacific Ocean are strengthening, hitting levels not seen since 1997/98, according to Australia’s Bureau of Meteorology.
– CWB is conducting its second annual crop tour of Western Canada this week (July 21-24), and traders will be following the yield results closely.
