By Phil Franz-Warkentin, Commodity News Service Canada
September 18, 2014
Winnipeg – ICE Futures Canada canola contracts settled at fresh contract lows on Thursday, as declines in the CBOT soy complex spilled over to weigh on values.
The most active November contract dropped below its previous low of C$409.00 per tonne in early activity, which triggered additional sell stops, said participants.
The declines in canola were also tied to mounting Canadian harvest pressure and increased farmer hedges, as weather conditions improve across the Prairies, said traders.
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A firmer tone in the Canadian dollar, which was up by over half a cent relative to its US counterpart, contributed to the declines in canola.
Scale down end user demand did provide some underlying support. There was also still enough uncertainty over the size and quality of the canola crop to keep some weather premiums in the futures, according to participants.
About 30,181 canola contracts were traded on Thursday, which compares with Wednesday when 16,679 contracts changed hands. Spreading accounted for 24,660 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down 11 to 12 cents per bushel on Thursday, settling just above contract lows in the November contract as the record large US production prospects remained a bearish influence overhanging the market.
With harvest operations starting up in some areas, early yield reports were seen confirming the large production ideas, said traders.
South American farmers will also soon be planting their soybean crop, and the talk out of Brazil and Argentina points to increasing soybean production in that continent as well.
Good end user demand did help temper the losses in beans.
SOYOIL futures were down on Thursday, backing away following recent gains.
SOYMEAL futures were down on Thursday, taking some direction from the declines in soybeans.
CORN futures in Chicago were down three to four cents per bushel on Thursday, as weather conditions for the corn crop across the Midwest remain favourable and big production expectations weighed on values.
Losses in wheat put spillover pressure on corn, as the two crops are linked by their usage as livestock feed.
However, technical support held to the downside in corn, with the market said to be looking oversold from a chart standpoint, according to analysts.
WHEAT futures in Chicago closed nine to 11 cents per bushel lower on Thursday, as poor demand and large global supplies weighed on prices.
Weekly US wheat export sales of only 314,500 tonnes came in well below trade estimates, and were seen as confirming ideas that US wheat remains overpriced in the global market.
The large world wheat stockpiles forecast by the USDA last week also helped keep the path of least resistance pointing lower, said participants.
On the other side, harvest delays for spring wheat crops in the Northern US and Canada were said to be somewhat supportive.
– The end of the monsoon season in India has been delayed, according to reports. The prolonged rainy season is expected to help moisture levels ahead of planting the wheat crop in October.
Settlement prices are in Canadian dollars per metric ton.
