By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
August 14, 2014
Winnipeg – ICE Futures Canada canola were weaker on Thursday, settling just above major support as losses in outside vegetable oil markets weighed on prices.
Malaysian palm oil futures hit their weakest levels in five years in overnight activity, and CBOT soyoil futures also posted large losses.
CBOT soybeans were higher, which is normally supportive for canola, but the Canadian crop is more closely linked to the oil part of the bean complex and the losses in the outside vegetable oil markets were bearish.
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Chart based fund selling contributed to the losses in canola, according to participants. However, the November contract did find some support after hitting the psychological C$430 per tonne level earlier in the day and held range bound overall.
A lack of farmer selling given the continued uncertainty over the size of the Canadian crop also helped limit the losses, with dryness in some parts of the Prairies raising some concerns, said traders.
About 18,784 canola contracts were traded on Thursday, which compares with Wednesday when 15,558 contracts changed hands. Spreading accounted for 7,624 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended seven to 19 cents US per bushel higher on Thursday, seeing a short covering correction following recent losses, analysts said.
Positive weekly export sales data from the USDA was also supportive. Export sales for beans totalled 61,400 tonnes for old crop, while new crop sales topped estimates at 1.08 million tonnes.
However, forecasts calling for beneficial rainfall in the US and ongoing expectations of record large 2014/15 US soybean production limited the gains.
SOYOIL futures were weaker Thursday, undermined by softness in the Malaysian palm oil market, traders said.
SOYMEAL futures finished stronger on Thursday, finding support from strong demand for the commodity, according to market watchers.
CORN futures in Chicago settled three to five cents US per bushel higher on Thursday, as signs of good demand for US supplies lifted prices, brokers said.
According to the USDA, 117,100 tonnes of old crop US corn were sold for export during the week, while 787,800 tonnes of new crop were sold, which was slightly above expectations.
However, good weather in the US Midwest and expectations that the USDA will up its 2014/15 production estimate in its next report were limiting the gains.
WHEAT futures were firmer, with Chicago, Minneapolis and Kansas City futures ending one to 10 cents US a bushel higher on Thursday.
Prices were underpinned by sentiment that the market was oversold.
Worries about continued rainfall slowing harvest and causing more quality problems in parts of Europe were also bullish, analysts said.
However, lackluster weekly export sales data and talk that wheat crops in the Black Sea region are looking good were bearish.
• The Islamic State, formerly known as ISIS, has seized about 40 per cent of Iraq’s wheat and is now selling it back to the government on the black market in an attempt to tighten its economic grip on the country, reports say.
• The USDA reported weekly export sales totalled 338,700 tonnes for wheat, falling below expectations calling for 450,000 to 650,000 tonnes.
• The European Union wheat crop is expected to be nearly record large, but Strategie Grains said the quality will be poorer than last year. The company estimated 59 per cent of the EU soft wheat crop making milling grade, down from their previous estimate of 67 per cent and 71 per cent last year.
Settlement prices are in Canadian dollars per metric ton.
