By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
June 2, 2014
Winnipeg – ICE Futures Canada canola contracts were lower on Monday, as bearish technical signals and good weather across most of the Prairies weighed on values.
Friday’s drop below C$460 per tonne in the nearby July contract was bearish from a chart standpoint, and canola saw some follow-through speculative selling to start the week, according to analysts.
Losses in CBOT soyoil contributed to the softer tone in canola, with the reasonably favourable weather conditions being reported across most of Western Canada also weighing on prices, according to participants.
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However, there are also still enough areas of concern to keep some weather premiums in the futures, which helped temper the declines. A lack of significant farmer selling, scale-down end user demand, and a weaker tone in the Canadian dollar provided some underlying support as well.
About 30,561 canola contracts were traded on Monday, which compares with Friday when 16,727 contracts changed hands. The July/November spread trade was a feature of the activity.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Friday’s close.
SOYBEAN futures at the Chicago Board of Trade were mixed on Monday with gains in the nearby months and losses in the new crop contracts. Strong export demand and bull spreading were cited as reasons behind the mixed positions.
Tight supplies of US soybeans could be depleted with more exports, said analysts. However expectations remain that a huge harvest is waiting in the fall.
Heat and dryness in Northeast China were expected to diminish the soybean crop that was planted in that region.
SOYOIL futures were lower on Monday.
SOYMEAL futures were higher, with spreading against soyoil a feature.
CORN futures in Chicago were mixed on Monday as favourable weather conditions improved expectations for this season’s crop and put pressure on values. Yields in the Midwest have been boosted by precipitation over the past few weeks, according to an analyst.
US planting progress is expected to be above 95% complete in a progress report due to be released after markets closed, said a broker.
Monday’s price action could signal a defensive tone through the early stages of the week, according to a report.
WHEAT futures in Chicago ended five to eight cents per bushel lower Monday on lukewarm demand and reports global wheat output rose by 8.6% in the marketing year that ended May 31.
Stockpiles are expected to total 186.5 million tons as of May 31, up 6.4% from the prior year, according to the USDA.
The US southern Great Plains and Midwest received as much as six times the normal amount of rain last week. The precipitation occurred in areas where winter wheat is grown and there is speculation it could improve yields badly hit by drought.
– Due to a reduced wheat crop in Turkey this year, the International Grains Council said that part of its flour export business will be filled by grinding imported wheat, known as “secondary processed trade,” according to a report.
– Asian importers are preparing to step up imports of Black Sea wheat, according to multiple reports.
– Argentina has seen domestic wheat prices rise by as much as 70% in certain regions, according to a report.
Settlement prices are in Canadian dollars per metric ton.
