By Dave Sims and Phil Franz-Warkentin, Commodity News Service
Winnipeg, May 19 – The ICE Futures Canada canola market finished stronger on Tuesday, buoyed by a sharply lower Canadian dollar which made canola, relative to its US counterpart, more attractive to international buyers.
Technical trading was also a feature, according to a trader.
The most-active July contract found support at the $460 per tonne level.
European rapeseed futures were higher which supported
prices while there were also concerns about dry soil conditions in parts of Saskatchewan and Alberta.
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“Two-thirds of Alberta is pretty dry,” said an analyst.
Farmer selling was slow as producers focused on seeding and
field-work, participants noted.
However, weakness throughout the US soy complex limited the gains.
Large global supplies of soybeans were also bearish.
Around 19,001 canola contracts were traded on Tuesday, which
SOYBEAN futures at the Chicago Board of Trade were down by eight to 11 cents per bushel on Tuesday, hitting fresh contract lows in the new crop months as the good US planting pace weighed on values. Sharp gains in the US dollar index were also bearish for the grains and oilseeds in general, as the firmer currency made US exports less attractive to international buyers.
Bearish technical signals contributed to the declines, with some sell-stops hit on the way down.
The US soybean crop was 45% seeded as of this past Sunday, according to the latest weekly USDA report. That was slightly behind pre-report trade estimates but still well ahead of the five-year average of 36% complete.
SOYOIL settled lower on Tuesday, with sharp losses in crude oil putting some pressure on the vegetable oil markets.
SOYMEAL futures settled with small losses on Tuesday, but lagged the rest of the soy complex to the downside.
CORN futures in Chicago settled four to six cents per bushel lower on Tuesday, with the good US seeding pace behind some of the losses. Spillover from the downturn in wheat added to the softer tone in corn.
The US corn crop was 85% seeded as of this past Sunday, which was ahead of the five-year average and pre-report trade estimates.
WHEAT futures in Chicago were down by nine to 11 cents per bushel on Tuesday, taking back most of Monday’s gains as US winter wheat ratings showed a modest improvement in the past week. Minneapolis futures were down by nine to ten cents, while Kansas City wheat lost 11 to 15 cents on the day.
The US wheat crop was rated as 45% good-to-excellent in the latest USDA report, which was up one percentage point from the previous week.
The sharply stronger US dollar was also bearish for wheat, as it will cut into international demand for US wheat.
However, concerns over excessive moisture and cold temperatures in some wheat growing regions of the US did remains somewhat supportive.
– US spring wheat was 94% planted as of this past Sunday, which was roughly double the pace seen at the same time the previous year. About 65% hit the good-to-excellent category, although traders were concerned that recent cold and wet weather could cut into the ratings in subsequent reports.
– Russia has ended its export tax on wheat a month-and-a-half earlier than originally expected, which should lead to more competition in the global market.
– Ukrainian farmers have planted 6.4 million hectares of spring crops as of May 18, which compares with 7.4 million at the same point the previous year, according to a report from the country.
