By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, June 10 – The ICE Futures Canada canola market finished on a mostly weaker note Wednesday, as spillover pressure from the US soy complex weighed on values.
Forecasts calling for rain in parts of Alberta and Saskatchewan also served to undermine the market, a trader said. The rain is expected to help alleviate dryness in certain areas.
“The (potential) rain event is bringing in selling pressure,” said the trader.
The Canadian dollar was stronger against its US counterpart which put pressure on canola as it made it less attractive on the international market.
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Large funds are staying away from aggressive bids right now, said the trader.
Values ultimately settled below the psychologically-important $490.00 per tonne mark.
Around 22,294 canola contracts were traded on Wednesday, which compares with Tuesday when 21,578 contracts changed hands. Spreading accounted for 14,380 of the contracts traded.
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 down by two to four cents per bushel on Wednesday, as market participants reacted to the latest USDA supply/demand estimates.
The USDA left its soybean production estimate for 2015/16 unchanged at 3.850 billion bushels, which came as a surprise to industry participants who had generally anticipated a downward revision.
The USDA did lower its ending stocks forecasts for both 2014/15 and 2015/16. By the end August 2016, US soybean stocks are now forecast at 475 million bushels, down from the May estimate of 500 million. For the current crop year, ending stocks are forecast at 330 million bushels, from 350 million.
SOYOIL settled with only small losses on Wednesday.
SOYMEAL futures settled lower on Wednesday.
CORN futures in Chicago settled six to eight cents per bushel lower on Wednesday, taking some direction from the updated supply/demand forecasts from the USDA.
The USDA left its estimate on the size of the 2015/16 US corn crop unchanged at 13.63 billion bushels, which was bearish for prices as most industry participants had been anticipating a downward revision.
The USDA also raised its US corn ending stocks projections for both 2014/15 and 2015/16. However, world supplies by the end of the 2015/16 crop year are forecast to be a little tighter than earlier forecasts, at 195.2 million tonnes. The USDA had forecast the world corn carryout at 197.0 million tonnes in May.
WHEAT futures in Chicago were down by 12 to 19 cents per bushel on Wednesday, as the larger-than-expected supply projections from the USDA triggered some speculative selling.
US wheat production in 2015/16 is now forecast at 2.121 billion bushels, which compares with the 2.026 billion bushels grown the previous year and an earlier estimate pegging the crop at 2.087 billion bushels.
The USDA also raised its US and world ending stocks projections. World wheat ending stocks for 2015/16 are now forecast at 202.4 million tonnes, which compares to the already historically large 2014/15 carryout of 200.4 million tonnes.
– Of the USDA totals, US spring wheat and durum production in 2015/16 is pegged at 616 million bushels, which compares with the 648 million bushels grown the previous year.
– Spring grain seeding operations in both Russia and Ukraine are nearly complete, according to reports from the two countries, with planted area up slightly on the year in Russia but down slightly in Ukraine.
– Russia’s export taxes on wheat are expected to impact higher quality wheat more so than lower quality supplies, which could see the country shift its export program towards moving lower quality wheat.
