By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, March 27 – THE ICE Futures Canada canola market finished weaker on Friday, largely due to spillover pressure from the US soy complex as well as some funds which decided to liquidate their positions.
Values dropped well below the psychologically important C$450 per tonne level (May contract) as traders positioned themselves before the release of the USDA planting intentions report on Tuesday.
European rapeseed futures and Malaysian palm oil were also lower which added to the losses.
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However, the Canadian dollar was weaker against its American counterpart which gave canola some support as the lower dollar
made canola more attractive to international buyers.
Commercial demand remains solid and there are continued concerns about a lack of soil moisture in Western Canada.
Around 21,935 canola contracts were traded on Friday, which compares with Thursday when around 27,484 contracts changed hands. Spreading accounted for 12,204 of the contracts traded.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down by six to seven cents per bushel on Friday, as expectations for large US plantings this spring weighed on values and traders positioned themselves ahead of next week’s USDA prospective plantings and quarterly stocks report.
The USDA releases its first official acreage estimates for 2015 on Tuesday, March 31. Average trade guesses generally range from 83 million to 88 million acres, with most estimates leaning to the higher end of that range, which would compare with the 83.7 million acres seeded in 2014.
The large South American crop remained a bearish influence in the background as well, as harvest conditions remain favourable and those beans will eventually compete with US stocks in the export market.
SOYOIL futures settled lower on Friday, with losses in crude oil and outside vegetable oil markets contributing to the declines.
SOYMEAL futures were lower on Friday, following soybeans.
CORN futures in Chicago held near unchanged on Friday, as traders were reluctant to push values too far one way or the other ahead of next week’s acreage report.
Ideas that corn area will be down on the year were somewhat supportive, while losses in crude oil did weigh on the ethanol-linked grain.
WHEAT futures in Chicago were up six to eight cents per bushel on Friday, seeing a corrective bounce after posting losses for most of the past week. Minneapolis and Kansas City futures showed even larger gains of nine to 12 cents.
Weather conditions remain variable for the US winter wheat crop, with some areas expected to see some much needed moisture over the next week, and others forecast to remain dry.
A firmer tone in the US dollar index did limit the upside potential in wheat, as the strong currency was keeping US wheat expensive in the global market.
– From a technical standpoint, the May CBOT wheat contract sees good support at the psychological US$5.00 per bushel level, after finishing the week above that point.
– Weather forecasts in India’s wheat growing regions are looking unfavourable for the developing crops, with excessive moisture leading to yield reductions, according to reports.
