By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
Feb. 10, 2014
Winnipeg – ICE Futures Canada canola contracts settled lower on Monday, with losses in CBOT soybeans behind some of the selling pressure.
The USDA released its monthly supply/demand report on Monday. Larger-than-expected US soybean ending stocks, together with an upward revision to the size of the Brazilian crop from the government agency, weighed on the oilseed markets – including canola.
Bearish technicals, increased farmer selling, and the ongoing logistics issues across the Prairies all weighed on prices as well, according to participants.
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However, spillover from the slightly firmer tone in CBOT soyoil did provide some underlying support.
Weakness in the Canadian dollar, along with ideas that canola is oversold and cheap in comparison to other oilseed markets, helped limit the losses as well.
About 27,819 canola contracts were traded on Monday, which compares with Friday when 22,679 contracts changed hands. Spreading accounted for 22,436 of the contracts traded.
Milling wheat, durum and barley futures were untraded, after seeing some price revisions following Friday’s close.
SOYBEAN futures closed one to six US cents per bushel weaker, as the USDA pegged larger than expected US ending stocks in their report released Monday morning.
The USDA left US ending stocks for soybeans unchanged at 150 million bushels, while traders expected them to lower the figure to 143 million.
The government agency also increased their estimate for the size of Brazil’s soybean crop by 1 million metric tonnes, to 90 million, which added to the bearish tone.
However, 150 million bushels of soybeans is still a tight ending stocks situation for the US, which limited the downside.
SOYOIL futures were 16 to 19 points higher on Monday, following the gains seen in the Malaysian palm oil futures market. Though, losses in soybeans limited the upside.
SOYMEAL futures closed US$1.40 to US$3.00 lower on with higher than expected US soybean ending stocks in the USDA report behind some of the price weakness, brokers said.
CORN futures were one to two US cents weaker Monday, as profit taking at the highs of the day caused prices to close lower, analysts said.
Slightly larger than expected South American corn production estimates in the USDA report added to the bearish tone. Brazilian corn production was pegged at 70.0 million metric tonnes, with Argentina at 24.0 million. Estimates called for a 70.0 million metric tonne Brazilian crop and 23.8 million metric tonnes of corn out of Argentina.
However, lower than expected US ending stocks of corn, due to an increase in exports, helped to limit the declines.
The USDA pegged 2013/14 corn ending stocks in the US at 1.481 billion bushels, down from 1.631 billion last month and expectations of 1.606 billion bushels.
WHEAT futures in the US moved higher on Monday, lifted by a bullish USDA report, which showed lower than expected US ending stocks for 2013/14. The USDA pegged US ending stocks at 558 million bushels, down from January’s estimate of 608 million and expectations of 602 million bushels.
Minneapolis, Kansas City and Chicago wheat futures finished anywhere from three to 13 cents US per bushel higher.
The USDA increased US wheat exports by 150 million bushels, to 1.175 million bushels, which also helped to underpin the futures markets.
• The USDA pegged global ending stocks of wheat for 2013/14 at 183.7 million tonnes, below their previous estimate of 185.4 million, but above the 176.1 million tonnes of carryover stocks in 2012/13.
• Egypt’s head state grain buyer reported that they would purchase between 3.7 and 4.0 million tonnes of wheat from domestic producers to meet supply needs through the middle of May.
Settlement prices are in Canadian dollars per metric ton.
