By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
May 9, 2014
Winnipeg – ICE Futures Canada canola contracts settled narrowly mixed on Friday, after seeing some wide price swings throughout the session.
The most active July contract traded within an eleven dollar range on Friday, hitting its highest levels in five months after the release of the USDA’s monthly supply/demand report sent old crop CBOT soybeans climbing higher.
Supportive technical signals contributed to the gains in canola at the time, with some speculative buy stops hit as prices moved above nearby resistance.
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Weakness in the Canadian dollar and the lateness of spring seeding across much of Western Canada provided some underlying support for canola as well, according to participants.
However, the large old crop supplies that continue to overhang the market remained a bearish influence. Profit taking at the session highs also weighed on canola, and values fell to consolidate around unchanged by the close.
About 20,928 canola contracts were traded on Friday, which compares with Thursday when 17,137 contracts changed hands. Spreading accounted for 10,756 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Thursday’s close.
CORN futures in Chicago dropped eight to 13 cents per bushel Friday after the USDA Supply and Demand report called for record production. Reserves will reach 1.726 billion bushels by August 31, 2015, ahead of a previous forecast of 1.146 billion bushels.
US old-crop corn stocks are less than expected due to increased demand over the past two months, said an analyst.
Global stockpiles are also set to grow due to large crops in Ukraine and Brazil, according to a report.
Projected yields are also high, said an analyst who also believes ethanol use may be underestimated.
SOYBEAN futures at the Chicago Board of Trade surged 15 to 17 cents per bushel Friday after the USDA pegged 2013-14 US ending stocks at 130 million bushels, two million fewer than earlier forecast.
The old crop soybean carryout suggests July/Nov could invert out to levels seen a year ago during the early summer months. New-crop soybean oil ending stocks are extremely high, according to an analyst who believes this could be the peak going forward.
New crop stocks are projected to be 82.2 million tonnes which would be a record.
SOYOIL futures were higher following soybeans.
SOYMEAL futures trended higher with global demand expected to remain steady.
WHEAT futures in Chicago fell 11 to 12 cents per bushel after new forecasts called for rain on Sunday and Monday in parts of Kansas.
Temperatures are also expected to be cooler in the Southern Plains this weekend after topping 100 degrees Fahrenheit for much of the week.
The new-crop wheat stocks for the US suggests a fifth straight consecutive decline, said one analyst who called the news bullish.
Wheat futures have gained 19% this year, which one analyst believes may be curbing their desirability from overseas buyers.
World supplies were considered somewhat bearish.
– Farmers in the Alsace region of France plan to grow more wheat over the next five years, according to a report.
– Farmers in the Punjabi region of Pakistan plan to grow more organic wheat due to financial concerns over the cost of fertilizer and pesticide.
– Positive signs are emerging in terms of a better UK wheat crop, said an analyst from the Northern Ireland Grain Trade Association.
Settlement prices are in Canadian dollars per metric ton.
