By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 22 – THE ICE Futures Canada canola market chalked up minor gains Wednesday, due to currency issues and technicals.
The Canadian dollar was weaker against its American counterpart, which made canola more attractive to international buyers.
The nearby November and January contracts enjoyed floor support at the C$520.00 per tonne mark.
However, sharp losses in US soyoil and mild losses in soybeans limited the gains.
Recent moisture across various parts of Alberta and Saskatchewan has also helped to alleviate the drought-like conditions.
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Many traders are speculating about how big the 2015/16 canola crop will be. Yesterday’s supply/demand estimates from Agriculture and Agri-food Canada suggested production would be
down from 14.925 million tonnes in June’s forecast to 14.300 million. The CWB estimated the 2015/16 crop at 12.180 million tonnes. Last year Canada grew 15.555 million tonnes of canola.
The CWB is currently leading a tour of crops across Western Canada and is scheduled to release its findings on Friday.
“The market is keenly waiting to see (that report),” said a trader.
Around 7,937 canola contracts were traded on Wednesday, which compares with Tuesday when around 9,938 contracts changed hands. Spreading accounted for 2,598 of the contracts traded.
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 mostly lower on Wednesday, losing as much as 10 cents per bushel in the most active contracts. Improving weather conditions across the Midwest accounted for much of the weakness.
Speculative selling added to the declines, with the move below US$10.00 per bushel in the most active November contract bearish from a chart standpoint.
However, solid end user demand did help limit the losses in beans and the nearby August contract managed to hold onto small gains at the close. The USDA also reported a fresh export sale of 120,000 tonnes of soybeans for delivery to China during the 2015/16 crop year.
SOYOIL settled lower on Wednesday.
SOYMEAL futures were mixed on Wednesday, with gains in the front months and a softer tone in the more deferred positions.
CORN futures in Chicago were down by two to four cents per bushel, with the relatively favourable weather conditions across the US Corn Belt weighing on values.
The strengthening US dollar and chart-based selling contributed to the declines in corn, with values touching their lowest levels in three weeks.
US ethanol production declined in the latest weekly report, which suggests a lessening demand for corn to produce the renewable fuel.
WHEAT futures in Chicago were down eight to nine cents per bushels on Wednesday, as poor export demand and the advancing US winter wheat harvest weighed on prices.
Egypt, the world’s largest wheat importer, once again bypassed the US in its latest tender with US prices said to be US$25 per tonne above competing offers.
The strengthening US dollar was also bearish for wheat, as it makes US wheat even less competitive in the global market.
– Iran has implemented import duties for wheat that work out to US$45 to US$50 per tonne, which will effectively limit any global sales to the country which is thought to be self-sufficient for the time being.
– Agriculture and Agri-Food Canada lowered its forecast for the country’s wheat crop to 27.1 million tonnes in a report out July 21, which would be about two million tonnes below the 2014/15 crop. Many industry participants expect drought conditions will lead to an even smaller crop, with all eyes on a CWB crop tour currently underway across the country.
