By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
April 9, 2015
Winnipeg – ICE Futures Canada canola contracts were weaker on Thursday, taking some direction from the losses in the CBOT soy complex. However, canola lagged beans to the downside and finished well off its session lows as some support was uncovered to the downside.
The USDA’s monthly supply/demand report was released earlier Thursday, and the US grains and oilseeds all moved lower despite a lack of any real surprises in the numbers.
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Bearish technical signals contributed to the softer tone in canola, but values managed to hold above major support and the most active months took back most of their losses by the close.
The need to keep some weather premiums in the futures ahead of spring seeding provided some underlying support, according to participants. A weaker tone in the Canadian dollar was also supportive, as the softer currency made exports more attractive to international buyers.
About 27,370 canola contracts were traded on Thursday, which compares with Wednesday when 12,812 contracts changed hands. The May/July spread was a feature of the activity as participants were rolling their positions out of the front month.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEANS futures ended 13 to 18 cents US per bushel lower on Thursday, undermined by signs of softening demand for the US commodity, analysts said.
Bigger than expected global soybean ending stocks, of 89.6 million metric tons, for 2014/15 in Thursday’s monthly USDA supply and demand report added to the bearish tone.
Expectations that the 2015/16 global supply situation will be even larger than 2014/15, due to record large acreage in the US and very big crops in South America, further undermined values.
Though, the USDA’s domestic ending stocks figure for 2014/15 was slightly smaller than expected at 370 million bushels, which was supportive.
SOYOIL futures finished eight to 11 points lower, following the losses seen in soybeans.
SOYMEAL futures were down sharply, as the large global soybean supply situation weighed on the market.
CORN futures in Chicago finished steady to two cents US per bushel lower on Thursday. Weakness in wheat and soybeans spilled over to weigh on corn, traders said.
The USDA’s projection calling for global ending stocks to total 188.5 million metric tons in 2014/15 also weighed on values. Their previous estimate called for global ending stocks total 185.3 million tons.
However, smaller than expected US ending stocks estimates from the USDA were supportive. Supplies are now pegged at 1.827 billion bushels at the end of 2014/15, below pre-report guesses of 1.851 billion bushels.
WHEAT futures on all three US trading platforms closed four to 10 cents US per bushel softer Thursday, with a lack of fresh export demand behind the declines, traders said.
The selling was also linked to forecasts calling for beneficial rainfall in some US winter wheat growing regions this week, including Kansas.
However, some support came from the USDA’s supply and demand report, as they lowered global and domestic ending stocks for 2014/15. The USDA pegged US stockpiles at 684 million bushels, from 691 million in March. Global supplies were at 197.2 million tons, down from 197.7 million last month.
• Ukraine planted 1.7 million hectares of spring crops as of April 8, down 74 per cent from the year prior, reports say. Total seeded area this spring is pegged at 16.5 million hectares.
• Weekly export sales out of the US totalled 319,900 metric tons for old crop, and 36,800 tons of new crop, USDA data showed.
• Australian wheat production is expected to total 24.39 million metric tons for 2015/16, according to ABARES, a research bureau within the country’s agriculture department.
Settlement prices are in Canadian dollars per metric ton.
