By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
July 3, 2014
Winnipeg – ICE Futures Canada canola contracts were stronger on Thursday, as the market managed to see a correction after dropping in sympathy with CBOT soybeans for most of the past week.
While soybeans remained pointed lower on Thursday, canola’s own fundamentals are said to be looking a little more bullish these days. Recent heavy rains and flooding in parts of Manitoba and Saskatchewan have raised concerns over the production prospects for this year’s crop.
Read Also
Canadian Financial Close: Loonie inches up
Canadian Financial Close: Loonie inches up By Glen Hallick Glacier Farm Media | MarketsFarm – The Canadian dollar increased slightly…
The extent of the damage was still being calculated, but the production uncertainty kept farmers on the sidelines and also brought in some end user pricing interest, according to participants. Chart-based buying contributed to the advances, as prices bounced off nearby lows.
The losses in CBOT soybeans did temper the gains in canola to some extent, according to traders. A stronger tone in the Canadian dollar, which was trading above 94 US cents, also put some pressure on values.
About 14,743 canola contracts were traded on Thursday, which compares with Wednesday when 21,269 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade ended lower Thursday, dragged down by the continuing effects of the USDA report which called for two million more acres to be planted this year in the US than originally forecast.
Follow through trading was also pressured by favourable growing conditions in several bean-sprouting areas.
Traders continue to speculate about how many soybean imports will find their way into the US, and what they will be used for.
SOYOIL futures were higher with spreading against soymeal.
SOYMEAL futures were lower.
CORN futures in Chicago were lower Thursday in choppy trading during the lead-up to the July 4th long weekend.
Values remained under pressure from Monday’s USDA report which called for a bumper harvest.
Private forecasters Informa Economics released their own estimates today pegging the US corn crop at 13.731 billion bushels. That number is down from last year’s record crop, analysts said. However, despite the drop in acres, yields are expected to jump to 165 bushels an acre from 158.8 bushels last year.
Weather forecasts in the Midwest were generally favourable for the development of corn as it heads into the critical pollination stage.
WHEAT futures in Chicago were roughly three to five cents per bushel higher Thursday and five to seven cents higher on the Kansas City Board of Trade due to profit-taking and ideas that values may have reached a near-term low.
Basis levels have slipped lower in the US, despite improving values at mill-sites. High costs associated with shipping were cited as reasons behind the change.
Acreage losses due to flooding in Saskatchewan and Manitoba have not been calculated yet, but will be significant for the eastern Prairie region, according to industry-watchers.
– The United Nations has increased its estimates for cereal grain stocks at the close of 2014/15. The US says stocks should be at their highest level in 12 years, analysts said.
– Floods in southern Brazil have eroded away some of the region’s most prized wheat crops, according to a report.
– Bad weather is cutting into the Serbian harvest. Industry-watchers expect production to drop by 19.6% (2.1 million tonnes).
