By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
March 17, 2015
Winnipeg – ICE Futures Canada canola contracts were weaker at Tuesday’s close, although activity was thin and choppy throughout the lightly traded session.
Spillover from the declines in CBOT soybeans accounted for some of the weakness in canola, while bearish chart signals contributed to the losses, according to participants.
The large South American soybean crop and light farmer selling also weighed on values, said traders.
On the other side, scale down end user pricing did provide some underlying support.
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The need to keep some weather premiums in the futures ahead of spring seeding was also supportive, with concerns over dryness starting to be raised in parts of Western Canada.
About 13,405 canola contracts were traded on Tuesday, which compares with Monday when 14,015 contracts changed hands. Spreading accounted for 8,190 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures ended 10 to 15 cents US per bushel lower on Tuesday, undermined by technical selling after the market broke through some key support levels, analysts said.
Strong competition from cheaper South American soybean supplies on the export market was also bearish, as was disappointing domestic crushing data. The National Oilseed Processors Association said 146.97 million bushels of US soybeans were crushed in February, below expectations of about 148.54 million bushels.
However, concerns about rainfall slowing the harvest of soybeans in some parts of Brazil later this week helped to limit the losses.
SOYOIL futures were down sharply Tuesday, following the weakness seen in soybeans and Malaysian palm oil values, brokers said.
SOYMEAL futures were also weaker, taking some direction from the losses seen in soybeans. Follow-through selling on Monday’s declines added to the bearish tone, traders noted.
CORN futures in Chicago finished with losses of six to eight cents US per bushel on Tuesday, reacting to news of slowing export demand for US supplies, as China made a recent purchase of corn from Ukraine.
Chart-based selling, weakness in wheat and soybeans, and the recent surge in the US dollar index were also overhanging values, participants said.
However, expectations that US farmers will reduce their planted acreage of corn this spring limited the downside.
WHEAT futures at the Chicago Board of Trade ended five to 11 cents US per bushel softer on Tuesday, undermined by profit taking on recent gains, analysts said. Minneapolis and Kansas City futures were nine to 12 cents softer.
Further downward pressure came from a continued lack of fresh export demand for US wheat, due to recent strength in the US dollar.
However, worries about dry weather causing problems for winter wheat crops in both Russia and the US provided some underlying support.
• Reports say Japan is looking to buy 98,257 metric tonnes of wheat, including 20,300 tonnes of US white wheat, 25,000 of hard red wheat, 22,200 tonnes of DNS and 30,750 tonnes of Canadian red spring. The country is hoping to have the products shipped between April 20 and May 20.
• Private exporters in India sold 2.5 million tonnes of wheat between the start of the current financial year, until January, the country’s Food Minister said.
• Data shows wheat exports out of the United Kingdom slowed to 137,378 tonnes in January, from 224,881 tonnes in December.
Settlement prices are in Canadian dollars per metric ton.
