By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
April 21, 2014
Winnipeg – ICE Futures Canada canola contracts settled lower on Monday, posting large losses as declines in the CBOT soy complex spilled over to weigh on prices.
Soybeans, corn, and wheat were all down in the US on Monday, and the broad-based speculative selling in those markets spilled over to weigh on canola as well, according to participants. Farmer hedges were also a factor, as producers were making some sales ahead of spring seeding.
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Sell stops were hit on the way down, as canola prices tested nearby support, said analysts.
On the other side, the broad selling pressure was only being met with scale down end user buying interest, although canola did manage to settle off its session lows. The need to keep some weather premiums in the futures ahead of the spring were somewhat supportive.
About 28,659 canola contracts were traded on Monday, which compares with Thursday when 21,951 contracts changed hands. Spreading was a feature, accounting for 22,058 of the contracts traded.
Milling wheat, durum and barley futures were untraded, but wheat saw some price revisions following the close.
SOYBEAN futures at the Chicago Board of Trade closed 11 to 26 cents US per bushel lower on Monday, as reports that China is cancelling orders because prices rallied sharply higher recently, weighed on the market, analysts said.
Technical based selling and spillover pressure from the declines seen in wheat futures were also behind the price softness.
However, the continued tight US supply situation and steady domestic demand helped to limit the losses.
SOYOIL futures were lower, following the declines seen in neighbouring commodity markets, brokers said.
SOYMEAL futures moved lower, undermined by spillover pressure from the declines seen in soybeans.
CORN futures in Chicago settled four to seven cents US per bushel weaker on Monday, as forecasts calling for beneficial weather in the US over the next two weeks were bearish. Drier weather is expected in the US Midwest, which will allow farmers to plant corn, analysts said.
Spillover pressure from the losses seen in wheat and worries about slowing export demand for the US commodity were also bearish.
However, tight US corn supplies and expectations of lower planted acreage this spring limited the declines.
WHEAT futures in the US ended sharply lower, with Minneapolis, Chicago and Kansas City futures finishing 14 to 25 cents US a bushel weaker on Monday.
Much of the selling in the market was linked to forecasts calling for beneficial weather in the US, participants said. Forecasts are calling for beneficial rainfall across the southern Great Plains over the next two weeks, which may help improve the condition of US winter wheat crops.
Reports that the tension between Ukraine and Russia may have cooled over the weekend also accounted for some of the price weakness, as did the large global supply situation.
• The European Union 2014/15 soft wheat crop is expected to produce 137.2 million tonnes, Strategie Grains said, which was down half a million tonnes from their previous report.
• China imported 538,950 tonnes of wheat in March, the country’s General Administration of Customs said. Most of the wheat came from Australia, with some also coming from the US.
• Punjabi flour millers say that buying wheat from Uttar Pradesh, a state in northern India, is no longer viable due to the recent implementation of a 5 per cent advance tax on the cereal entering the State.
Settlement prices are in Canadian dollars per metric ton.
