By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
May 5, 2014
Winnipeg – ICE Futures Canada canola contracts were softer on Monday, as the market reacted to the latest stocks report from Statistics Canada.
StatsCan pegged the country’s canola supplies, as of March 31, at 9 million tonnes, which is a new record for that time of year and roughly double the supplies on hand at the same time a year ago.
While the big stocks did not come as a surprise to the trade, the confirmation was still enough to weigh on prices, according to participants.
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Losses in CBOT soyoil and old crop soybeans put some spillover pressure on canola as well, said traders. However, gains in new crop soybeans were somewhat supportive on the other side.
Scale down commercial buying interest helped limit the losses as well. A lack of aggressive farmer selling, despite the big supplies in the countryside, was also said to be somewhat supportive.
About 4,622 canola contracts were traded on Monday, which compares with Friday when 17,095 contracts changed hands. Spreading accounted for 1,450 of the contracts traded. Japanese markets were closed for a holiday today, which contributed to the lighter volumes in canola, according to a broker.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Friday’s close.
WHEAT futures in Chicago soared 10 to 13 cents per bushel on Monday, as drought conditions in the US intensified and concerns grew over the political situation in Ukraine and its effects on wheat exports.
Temperatures in Kansas and Oklahoma were recorded at 90 degrees Fahrenheit in certain places over the weekend, according to analysts.
At a gathering of wheat-watchers last week in Kansas, winter-wheat yields for Kansas were estimated at 33.2 bushels an acre, the lowest in seven years. Over in Oklahoma, a group there estimated this year’s production would be 66.5 million bushels, which would be the lowest in over 50 years.
SOYBEAN futures at the Chicago Board of Trade were mixed Monday, as old crop supplies were pressured by reports some US crushers are backing off on bids for US soybeans in favour of South American suppliers while new crop held a firmer tone.
Oilseed shipments from Brazil are starting to arrive in the US at a time when domestic supplies are low, according to a report.
Markets were also pressured by a Statistics Canada report which pegged Canadian stocks at 9.02 million tonnes.
Dry conditions in the Midwest this week could help planting efforts, said an analyst.
SOYOIL futures were down on Monday.
SOYMEAL futures were mixed, tracking soybeans.
CORN futures in Chicago followed the wheat market and rose five to nine cents per bushel Monday after falling in two previous sessions below US$5 a bushel.
Analysts expect a USDA report, due to be released later today, will show corn planting is 33% complete. That would be down from the five-year average for early May which stands at 47%.
Farmers are expected to complete much of their planting by the end of this week.
– Japan is continuing to insist that wheat tariffs be a part of the suggested Trans-Pacific Partnership, according to reports.
– Egypt has put in an order for 55,000 tonnes of Ukrainian wheat along with 55,000 tonnes of Russian wheat, according to the Egyptian Grain Authority.
– India’s compliance with WTO obligations for exports of wheat continues to be questioned by the US, Canada and other major exporting nations.
Settlement prices are in Canadian dollars per metric ton.
