By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
May 6, 2014
Winnipeg – ICE Futures Canada canola contracts were weaker on Tuesday, taking some direction from the softer tone in CBOT soybeans.
The stronger Canadian dollar, which was up by over half a cent relative to its US counterpart, put further pressure on canola, according to traders. The burdensome canola supply situation which was confirmed by StatsCan yesterday, bearish technical signals, all weighed on canola as well. Overnight declines in Malaysian palm oil and European rapeseed futures also accounted for some of the weakness.
Read Also
ICE canola weaker in choppy trade
Glacier FarmMedia — The ICE Futures canola market traded to both sides of unchanged Tuesday morning, with the bias pointing…
However, continued ideas that canola is undervalued compared to other oilseeds limited the downside, said traders.
Concerns over the late start to spring seeding across much of Western Canada, due to cool and wet conditions, were also supportive.
About 13,517 canola contracts were traded on Tuesday, which compares with Monday when 4,622 contracts changed hands. Spreading accounted for 8,258 of the contracts traded, with adjustments to the July/November spread a feature.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Monday’s close.
WHEAT futures in Chicago continued to gain Tuesday, rising 10 cents per bushel and 11 to 13 cents per bushel for Kansas City wheat due to concerns over drought damage in the US.
According to the National Weather Service, little precipitation is expected in much of Kansas, Oklahoma or Texas this week while temperatures could reach 100 degrees Fahrenheit or more.
The hot weather comes at a critical time as many of the wheat-heads in the Southern Plains are attempting to emerge from their stalks, according to a report.
SOYBEAN futures at the Chicago Board of Trade were lower by one to three cents per bushel Tuesday, on ideas that US imports of soybeans will rise in the future, fuelled by demand from domestic crushers and processors.
Many importers are looking to use soybeans for vegetable oil and cattle feed and have turned to Brazil, said an analyst, noting this illustrates how few soybeans are in US storage.
Imports could also come from Canada. One analyst suggested they would be as high as 80 to 90 million bushels.
Soybean prices have also punched through key support levels, leaving some investors to target lower prices, said the analyst.
SOYOIL futures were mixed on Tuesday.
SOYMEAL futures were mixed. Losses in soybeans weighed on prices, while the strength in corn was somewhat supportive.
CORN futures in Chicago rose nine cents per bushel Tuesday on inter-market spreads and reports of US planting delays.
According to a USDA report released Monday, 29 percent of the US corn crop has been seeded, 2 percent less than what many analysts had been projecting earlier.
Some acres intended for corn may get switched to soybeans, according to reports, which was bullish for corn.
– A research group in New Zealand says the principle disease affecting wheat crops in the country, Septoria Tritici Blotch (STB) has developed resistance to the fungicide which had been the most effective variety used in controlling it.
– Farmers in Australia are being urged by an industry group to target wheat varieties to Asian customers more specifically.
– War and drought could push Syria’s wheat crop below 1 million tonnes for the first time in 40 years.
Settlement prices are in Canadian dollars per metric ton.
