By Phil Franz-Warkentin, Commodity News Service Canada
April 10, 2014
Winnipeg – ICE Futures Canada canola contracts were down on Thursday, seeing a profit-taking correction after hitting their highest levels in four months on Wednesday.
After being active buyers earlier in the week, fund traders were thought to have liquidated some of those positions on Thursday, according to traders. Losses in the CBOT soy complex contributed to the weaker tone in canola, as the Canadian oilseed is lacking any supportive fundamental news of its own. Canada’s burdensome supply situation remains a bearish influence overhanging the market.
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…
Light farmer selling was also a factor, although many producers were on the sidelines after making sales on the way up earlier in the week.
On the other side, scale down commercial demand was somewhat supportive, according to traders. The weaker Canadian dollar and ideas that the nearby technical trend has shifted higher also provided some underlying support.
About 28,471 canola contracts were traded on Thursday, which compares with Wednesday when 31,885 contracts changed hands. Spreading was a feature.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade were down one to 13 cents per bushel on Thursday, retreating from recent gains as traders took profits and bearish export news weighed on prices.
News that China had cancelled purchases of at least 500,000 tonnes of US and Brazilian soybeans, or 10 to 12 cargoes, accounted for some of the selling pressure, according to participants. Poor crush margins in the country were causing Chinese processors to lose up to a hundred dollars per tonne when processing soybeans, said reports.
Wednesday’s supply/demand report from the USDA, which pegged US soybean ending stocks below average trade guesses, did provide some underlying support as nearby supplies will still need to be rationed even with the Chinese cancellations.
SOYOIL futures were down on Thursday, following soybeans.
SOYMEAL futures were mixed on Thursday, with losses in the front months but a firmer tone in the more deferred positions.
CORN futures in Chicago were narrowly mixed on Thursday, holding within a penny or two of unchanged in directionless activity.
Warmer temperatures across the Midwest did put some pressure on the market, as the better weather will help fields thaw out and should allow farmers to move forward with spring fieldwork and seeding, said traders.
On the other side, the tightening corn ending stocks predicted by the USDA yesterday did remain supportive.
WHEAT futures in Chicago settled six to seven cents per bushel lower on Thursday.
Much of the weakness was tied to follow-through selling after Wednesday’s move down, as the USDA raised its wheat ending stocks predictions for both the US and the world. Ideas that higher prices will cause US livestock feeders to use less wheat in their rations also weighed on values.
Ongoing dryness concerns across the southern US plains did remain supportive for wheat, limiting the losses, especially as the forecasts remain warm, dry, and windy across the driest regions.
– The Egyptian government will set aside about US$1.4 billion in order to buy wheat from local farmers, according to the country’s Supplies Minister. The country is the world’s largest wheat importer and the investment in local production is expected to help lessen that reliance on imports.
– CWB, the former Canadian Wheat Board, announced plans to build a 42,000 tonne capacity grain terminal elevator in Saskatchewan on Thursday. The facility is the second such elevator announced by the CWB in recent weeks and is scheduled to be open in time for the 2015 harvest.
– Farmers in South Dakota have started planting spring wheat in some areas, according to state reports.
Settlement prices are in Canadian dollars per metric ton.
