By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
September 19, 2014
Winnipeg – ICE Futures Canada canola contracts settled at fresh contract lows for the second straight session, dropping below the psychological C$400 mark in the most active November contract.
Speculators were noted sellers, as the big declines triggered a round of long liquidation from traders who had been betting that prices would rise. Other speculators were adding to the already large net short position, said participants.
Losses in the CBOT soy complex accounted for some of the
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Improving weather conditions across Western Canada and expectations for mounting harvest pressure also weighed on canola.
However, a lack of significant farmer selling did help temper the declines. Scale down end user demand and a weaker tone in the Canadian dollar were also somewhat supportive.
About 59,967 canola contracts were traded on Friday, which compares with Thursday when 30,181 contracts changed hands. Spreading was a feature, accounting for the majority of the volumes.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended 13 to 15 cents US per bushel lower ahead of the weekend on Friday, as forecasts in the US are calling for beneficial harvesting weather throughout the next week, analysts said.
Ongoing expectations of record large 2014/15 US soybean production further undermined values, as early yield reports are very good.
Talk that South America is anticipating another bumper crop, as conditions ahead of seeding are favourable, added to the bearish tone.
However, demand for the US oilseed remains strong, which kept prices from falling even lower.
SOYOIL futures were softer, following the weakness in Chicago soybean and Malaysian palm oil futures.
SOYMEAL futures were also weaker, taking direction from soybeans.
CORN futures in Chicago settled with losses of five to seven cents US per bushel on Friday, undermined by forecasts calling for beneficial harvesting weather for all of next week in the US, brokers said.
Expectations of record large 2014/15 production and spillover pressure from the declines in wheat also weighed on the market.
However, signs of good demand for US corn and oversold price sentiment tempered the losses.
WHEAT futures were lower in the US, with Kansas City, Chicago and Minneapolis futures finishing nine to 15 cents US per bushel lower.
Weak demand for the US commodity undermined values, as did talk that farmers made good progress on spring wheat harvesting this week, analysts said.
The large global supply situation and continued strength in the value of the US dollar also put downward pressure on the market.
Reports of beneficial rainfall for winter wheat planting in the southern US Plains this week were also bearish.
However, sentiment that the market is oversold limited the declines.
• Argentina’s wheat crop is in good condition, a report from the country’s Ministry of Agriculture said. As of September 11, 83 per cent of the 4.5 million hectares seeded were in the tillering phase.
• Brazil’s Parana state has harvested 29 per cent of its wheat crop so far, according to a weekly report from the state’s Secretariat of Agriculture.
• India’s grain production for its summer 2014/15 crop is expected to total 120.27 million tonnes, down from 129.24 million tonnes last year, reports say.
Settlement prices are in Canadian dollars per metric ton.
