By Phil Franz-Warkentin and Marney Blunt, Commodity News Service Canada
June 20, 2014
Winnipeg – ICE Futures Canada canola contracts were lower at Friday’s close, after trading to both sides of unchanged throughout the session. Relatively favourable crop conditions, a stronger Canadian dollar, and spillover from the losses in CBOT soyoil all weighed on prices.
While there are still a number of problem areas, including unseeded acres in parts of Manitoba and Saskatchewan, North American crops are generally thought to be in good shape. The relatively favourable prospects weighed on values, said traders. CBOT soyoil was also down on Friday, putting spillover pressure on canola.
Read Also
Canadian Financial Close: Loonie stands pat
By Glen Hallick Glacier Farm Media | MarketsFarm – The Canadian dollar was unchanged on Friday as weakness in the…
The stronger Canadian dollar, which was up by over half a cent relative to its US counterpart, was bearish as well. The stronger currency cuts into crush margins and also makes exports less attractive.
Some speculative and commercial buying interest did help underpin the market, limiting the losses, as canola remains attractively priced compared to other oilseeds. Ideas that ending stocks may not be as burdensome as originally anticipated were also somewhat supportive, said participants.
About 21,178 canola contracts were traded on Friday, which compares with Thursday when 21,341 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade were mixed on Friday, amid positioning ahead of the weekend.
Old crop values were seeing the only losses, as those prices were pressured by easing concerns about tight U.S. supplies, due to a large upcoming U.S. crop.
Crops in the U.S. Midwest have recently started growing due to abundant precipitation in the past month that is expected to continue over the next six to ten days in the region. Approximately three-quarters of the soybean crop was in good to excellent condition as of Sunday, according to the U.S. Department of Agriculture (USDA).
July soybean futures dropped 5.00 cents U.S. per bushel on Friday while November contracts increased by 4.50 cents U.S. per bushel.
Short-covering following recent losses helped push up new crop values.
SOYOIL futures closed sharply lower on Friday, amid spreading against soymeal.
SOYMEAL futures closed higher on June 20, continuing with the spread against soyoil
CORN futures in Chicago gained as speculative investors bet the lowest price in four months will attract buyers, brokers say.
July corn futures gained 2.75 cents U.S. per bushel and December corn contracts rose 4.00 cents U.S. per bushel.
Traders also may be betting that the best crop conditions in four years will see declines due to excessive precipitation flood some crop fields in the U.S. Midwest or dry weather entering the forecast and threatening growing areas.
WHEAT futures in Chicago declined on Friday on ideas that increasing global production will offset a decreasing U.S. winter crop, traders say.
July wheat futures decreased by 8.25 cents U.S. per bushel, and December futures dropped 8.00 cents U.S. per bushel.
World output during the 2013/14 year totalled approximately 714 million metric tonnes, an 8.6 per cent increase from the previous year, according to the USDA. This, in turn, will lead to larger stockpiles, brokers say.
• Washington State University has partnered with AgriPro, a division of Syngenta Cereals, to market a new variety of hard white spring wheat known as Dayn.
• Dayn wheat’s attributes include a high resistance to stripe dust, excellent grain quality for food production and superior yields in irrigated areas such as southern Idaho.
• Above normal amounts of precipitation are forecast for key production areas for wheat in South Africa, which producers hope will benefit crop conditions.
Settlement prices are in Canadian dollars per metric ton.
