By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, June 8 – THE ICE Futures Canada canola market bounced around unchanged on Monday before ending mostly lower. Trading was a two-sided, chart-based affair with grain companies and hedge funds selling at the close.
Values temporarily tested the psychologically important US$500 per tonne mark before settling lower.
Weakness in US soyoil contributed to the losses while the Canadian dollar was firmer against its American counterpart, which made canola less desirable on the international stage.
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However, dry conditions throughout the Prairies, and their potential to lower yields were supportive for prices.
US soybeans and soymeal also lent spillover strength to canola.
Speculators were on both sides of the market throughout the session.
Around 27,781 canola contracts were traded on Monday, which compares with Friday when around 34,211 contracts changed hands.
Spreading accounted for 14,380 of the contracts traded.
Milling wheat and durum were untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were up by 4 to 6 cents per bushel on Monday, as concerns over planting delays in parts of the Midwest provided support.
Upwards of 20% of intended US soybean acres are still unseeded, and forecasts calling for widespread precipitation this week will likely cause further delays, according to participants.
Strong crush margins added to the firmer tone in soybeans, while a rally in wheat provided some spillover support as well.
SOYOIL settled lower on Monday, with adjustments to the oil/meal spreads behind some of the selling pressure.
SOYMEAL futures settled higher on Monday, with the advances in the neighbouring grain markets providing some support.
CORN futures in Chicago settled four to five cents per bushel higher on Monday, with excess moisture concerns also providing some support.
Spillover from the gains in wheat and some chart-based buying interest added to the strength in corn, according to participants.
However, the US corn crop is nearly all seeded, and conditions for what is in the ground remain relatively favourable. Average trade guesses place the crop at about 75% good-to-excellent.
WHEAT futures in Chicago were up by 11 to 13 cents per bushel on Monday, as weather concerns in the US and other wheat growing regions of the world provided support. Some buy-stops were hit on the way up, contributing to the advances.
In the US, excess rainfall in recent weeks has damaged the winter wheat crop, with both yields and quality questionable as harvest operations start up in the southern Plains.
Dryness in Russia and Europe was also lending support to the wheat market. However, Russia is reported to be increasing its exports, which was serving to limit the upside potential in the US futures.
– Russia has begun shipping grain to Iran in exchange for other goods, including oil, according to reports. Russia shipped the first 100,000 tonnes of grain during the past week, and intends to move about 1.5 million tonnes of grain, including wheat, to Iran this year. That compares with 1.3 million tonnes in 2014.
– While Russian wheat is moving to Iran, other business may be curtailed from the country as production uncertainty has led to talk that new export taxes may soon be introduced in Russia.
– India will need to import more wheat this year, due to disappointing local crops, according to a report from the USDA. The Foreign Agriculture Service pegged India’s 2015/16 wheat production at 87 million tonnes, which is below earlier guesses and well off the record 95.8 million tonnes grown the previous year. Imports are forecast at 1 million tonnes, well above the 125,000 tonnes imported by India in 2014/15.
