By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 23 – THE ICE Futures Canada canola market settled lower Thursday, following declines in the US soy complex.
The Canadian dollar was slightly higher against its US counterpart which made canola less attractive to buyers overseas.
Malaysian palm oil futures were lower which contributed to the declines.
Recent precipitation across parts of Western Canada was also bearish for prices.
However, European rapeseed futures were firmer which limited the losses.
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Yesterday’s forecast from the CWB (formerly known as the Canadian Wheat Board) that pegged 2015/16 canola production at 12.18 million tonnes, which was much less than last year, continues to underpin canola.
Traders are preparing for the release of the CWB’s crop tour findings scheduled for Friday. A delegation of scouts is touring Alberta, Saskatchewan and Manitoba this week. So far drought-stress has been detected in many parts of Alberta and Saskatchewan while Manitoba generally looks better.
Around 12,755 canola contracts were traded on Thursday, which compares with Wednesday when around 7,937 contracts changed hands. Spreading accounted for 6,770 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 down by seven to 15 cents per bushel on Thursday, as improving Midwestern weather conditions and poor export demand weighed on values.
The USDA reported weekly US soybean sales of just over 300,000 tonnes, which was at the low end of trade guesses. Cheaper South American supplies are said to be displacing US beans in the international market.
Bearish chart signals contributed to the declines, with Wednesday’s move below US$10.00 per bushel in the most active November contract encouraging some additional speculative selling.
SOYOIL settled lower on Thursday.
SOYMEAL futures were weaker on Thursday, as weekly export sales included a large cancellation.
CORN futures in Chicago were narrowly mixed at Thursday’s close, settling within a penny of unchanged.
Improving Midwestern weather and poor export demand both weighed on corn in early activity, but the market managed to recover as the day progressed amid oversold price sentiment.
Gains in wheat also provided some spillover support for corn, according to participants.
WHEAT futures in Chicago were up two to five cents per bushel on Thursday, as some surprisingly favourable export news provided support. Minneapolis and Kansas City wheat futures posted similar gains.
The USDA reported weekly US wheat export sales of over 500,000 tonnes, which topped trade estimates and marked the second best wheat sales of the marketing year so far.
However, the advancing US winter wheat harvest and reports of improving wheat crops elsewhere in the world limited the upside potential.
– Wheat production in Syria for 2015 is forecast at 2.445 million tonnes by the UN Food and Agriculture Organization and World Food Programme. That’s better than the previous year in the war-torn country, but still 800,000 tonnes short of what’s needed.
– Japan bought 141,438 tonnes of wheat from the US, Canada, and Australia in a tender.
