By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
September 17, 2014
Winnipeg – ICE Futures Canada canola contracts settled with small losses in the most active months on Wednesday, after a choppy day that saw prices trade to both sides of unchanged.
Mounting harvest pressure, as weather conditions turn warmer and drier across the Canadian Prairies, contributed to the declines, said participants who noted that early yield reports were beating expectations.
Bearish technical signals added to the weakness in canola, although values managed to hold above key support levels.
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Advances in CBOT soyoil, which has gained nearly two cents per pound in the December contract over the past week, helped underpin canola, said traders.
There is also still enough uncertainty over the size and quality of the canola crop to keep some weather premiums in the futures.
About 16,679 canola contracts were traded on Wednesday, which compares with Tuesday when 19,231 contracts changed hands. Spreading accounted for 11,432 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended one to three cents US per bushel higher on Wednesday, lifted by continued signs of strong demand for the US commodity.
The USDA announced private exporters booked sales of 620,000 tonnes of soybeans for delivery to China in 2014/15 on Wednesday.
Worries about cool, wet weather causing problems for some soybean crops in the northern US Farm Belt were also supportive.
Though, the US bean crop is still expected to be record large, which weighed on values.
Forecasts calling for beneficial weather, which will aid harvest activities over the next two weeks, also undermined prices.
SOYOIL futures were stronger, finding spillover support from the gains seen in Malaysian palm oil futures overnight, market watchers said. Spreading against soymeal was also bullish.
SOYMEAL futures finished lower on Wednesday, as traders worked to correct the spread between soymeal and soyoil, brokers said.
CORN futures in Chicago settled with losses of one to two cents US per bushel on Wednesday, with forecasts calling for beneficial harvesting weather over the next two weeks weighing on the market.
Ongoing anticipation of record large 2014/15 US corn production was also overhanging the futures.
News that officials from China and the US still haven’t come to an agreement over DDGS added to the bearish tone, analysts said.
Though, sentiment that the market is oversold helped to limit the downside.
WHEAT futures were mixed, with Kansas City and Minneapolis futures finishing one to four cents US per bushel lower. Chicago Board of Trade futures ended three to four cents US per bushel firmer on Wednesday, seeing an upward correction following the sharp declines seen over the past few weeks, traders said.
Ideas that recent price weakness will attract fresh export demand for US wheat were also supportive, as were concerns about dry conditions hindering US winter wheat planting this fall.
On the other side, the large global supply situation continued to overhang prices. News of good yields for US spring wheat crops was also bearish, though diminished quality remains a concern.
• Russian grain analyst SovEcon upped their Russian wheat export estimate to 22.5 million metric tonnes for 2014/15. Their previous guess called for 22.0 million metric tonnes out of the country.
• Winter wheat yields are trending above the five-year average of 10.01 tonnes per hectare in parts of the United Kingdom, at 11.48 tonnes per hectare, according to a report from HGCA, the UK’s Agriculture and Horticulture Development Board.
• Wheat protein levels in Belgium are very low this year due to the tightening of nitrogen standards, Synagra, Belgium’s association of grain collectors, said.
Settlement prices are in Canadian dollars per metric ton.
