By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, June 11 – Canola contracts on the ICE Futures Canada platform finished slightly lower Thursday on mostly directionless and volatile trading. Traders are anxiously waiting for fresh news about state of the western Canadian crop.
The US soy complex was weaker which put downward pressure on values while Malaysian palm oil and European rapeseed futures were lower.
The July/November spread tightened while good volumes were enjoyed on the spreads in general, according to a trader.
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“There’s some basis contracts that farmers have to get out of there by the middle of the month and so some selling is trickling in from that side,” said the trader.
However, forecasts calling for rain in Alberta and Saskatchewan later this week were downgraded. The inch of rain that was supposed to fall in certain areas has been lowered to three tenths of an inch. This caused some wild swings in early trading, the trader noted.
The new forecast is more supportive from a price standpoint though, as it means excessively dry patches of the western prairies will continue to be stressed.
The Canadian dollar was weaker against its US counterpart which made canola more attractive to domestic crushers and exporters.
Around 29,759 canola contracts were traded on Thursday, which compares with Wednesday when 22,294 contracts changed hands.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were down by nine to 14 cents per bushel on Thursday, seeing some follow-through selling after Wednesday’s declines.
Participants were continuing to digest the USDA’s monthly supply/demand report, released Wednesday, which included a larger than expected US soybean production estimate.
Brazil’s Conab released their own crop estimates on Thursday, raising their projection on the size of that’s country’s soybean crop by a million tonnes – to 96 million.
The stronger tone in the US dollar index was another bearish influence, as the firmer currency cuts into export demand.
SOYOIL settled lower on Thursday.
SOYMEAL futures settled lower on Thursday, but lagged the rest of the soy complex to the downside.
CORN futures in Chicago were steady to down one cent per bushel on Thursday, as large supply projections and the stronger US dollar also weighed on values.
Traders were still digesting Wednesday’s USDA report, that included upward revisions to the supply projections for both the US and globally.
However, increased ethanol production in the US was somewhat supportive for corn, given the rising demand from that sector.
WHEAT futures in Chicago were down by nine to 10 cents per bushel on Thursday, seeing some follow-through selling after yesterday’s losses.
US wheat production in 2015/16 is now forecast at 2.121 billion bushels, which compares with the 2.026 billion bushels grown the previous year and an earlier estimate pegging the crop at 2.087 billion bushels.
The USDA also raised its US and world ending stocks projections in Wednesday’s reports.
In addition, US wheat remains expensive in the global market, with some analysts reporting that Russia was selling wheat into Egypt for about US$45 per tonne cheaper than US offers.
– Iraq is working to become a net exporter of grain by 2017 in an effort to diversify its economy, according to officials from the country. Domestic production is forecast at over 2 million tonnes this year, but consumption is projected at roughly 4.5 million tonnes. The Iraqi trade ministry did not provide specifics on how it intends to raise production to a point where exports are viable.
– Algeria is also looking to increase its grain production, according to officials at the International Grains Council annual meeting in London. The country will produce 4.6 million tonnes of grain this year, according to the International Grains Council, but is looking to bring its average up to 6.7 million tonnes.
