By Dave Sims and Jade Markus, Commodity News Service Canada
Winnipeg, June 30 – THE ICE Futures Canada canola market finished sharply higher in volatile trading Tuesday following heavy gains in the US Soy Complex.
Soybeans rallied sharply following the USDA stocks and acreage report. The USDA predicted smaller than expected supplies at the beginning of the month.
The market had little reaction to this morning’s release of
the Statistics Canada acreage report which pegged 2015/16 canola
acreage at 19.84 million acres in Western Canada. That is
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Analysts say concerns over declining yield prospects were more important than the acreage number.
Persistent dry conditions across Alberta and Saskatchewan
continue to support canola.
As well, the Canadian dollar was also weaker relative to its
US counterpart, which made canola more attractive to
international buyers.
However, there are ideas that canola is already expensive compared to other vegetable oils which may have helped to limit the gains.
The economic turmoil in Greece was also causing some
hesitation among investors which was bearish for the market.
Milling wheat, durum, and barley were all untraded.
Around 23,130 canola contracts were traded on Tuesday, which
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of
Trade hit a five-and-a-half month high on Tuesday, closing 28 to
57 cents per bushel higher amid weather concerns.
While the USDA report said soybean numbers were slightly
above analyst expectations, market watchers say the trade is
dismissing that information in light of continued wetness in the
US.
Particularly heavy rains and flooding are keeping farmers
from seeding the rest of their acres, and putting existing crops
at risk for a host of complications.
SOYOIL prices settled stronger on Tuesday following
neighbouring markets.
SOYMEAL closed higher on Tuesday following soybean futures.
CORN futures closed 15 to 30 cents per bushel stronger on
than analyst expectations.
The USDA pegged 2015 acreage at 88.9-million, down from
90.6-million from last year.
The crop’s health ratings are also declining due to soil
moisture, according to traders, which added to the bullish tone.
About 68 per cent of crops are now rated good to excellent,
down three percentage points from last week.
WHEAT futures in Chicago closed 27 to 34 cents per bushel
stronger Tuesday, following current weather concerns rather than
government data.
Market watchers say recent and continued rains in the US
may have negatively impacted crops, which provided support for
prices.
However, wheat stock piles are growing ahead of analyst
expectations, which is bearish.
As of June 1, 2015 wheat stockpiles in the US were 753-million
bushels, up from 590-million at the same time in 2014.