By Phil Franz-Warkentin and Marney Blunt, Commodity News Service Canada
June 17, 2014
Winnipeg – ICE Futures Canada canola contracts were mixed on Tuesday, with gains in the nearby July contract and losses in the more deferred new crop months.
Speculators and commercial traders were both on the buy side in the front month, as they were covering short positions and rolling out of the front month ahead of deliveries. A weaker tone in the Canadian dollar and gains in CBOT soyoil also provided some underlying support for canola.
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However, the more actively traded new crop months were all lower, with spillover selling from the declines in CBOT soybeans behind some of the weakness.
The relatively favourable crop prospects seen across Western Canada were another bearish factor. While there are still some areas of concern where excess moisture will likely result in unseeded acres, the majority of fields are reported to be looking good and canola is starting to flower in some areas.
About 17,382 canola contracts were traded on Tuesday, which compares with Monday when 13,025 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade were down on Tuesday, as crop prospects have been improving with persistent and favourable growing weather in the US Midwest, analysts say. July soybean futures closed 23.50 cents US per bushel lower than Monday and November futures decreased by 5 cents US per bushel.
Reports say as much as six times the normal precipitation has fallen in the US Midwest, improving soil conditions. Approximately 73 per cent of soybeans were in good or excellent condition as of Sunday, according to a report released on Monday from the US Department of Agriculture (USDA).
Soybean output is also projected to be the highest ever at 3.635 billion bushels on yields of 45.2 bushels per acre, traders say.
SOYOIL futures closed higher on Tuesday.
SOYMEAL futures closed lower on June 17.
CORN futures in Chicago dropped to the lowest price in four months on Tuesday, due to an abundant amount of rain falling in the US Corn Belt and improving soil conditions. About 76 per cent of the corn crop is in good or excellent condition, according to a report released by the USDA on Monday.
Expectations that the 2014/15 crop will be very large also weighed in on values. Last week the government had forecast domestic corn production at 13.935 billion bushels on yields of 165.3 bushels an acre. Both of those numbers are record highs, brokers say.
July corn contracts dropped 2.25 cents US per bushel on Tuesday while December futures fell 2.50 cents US per bushel.
WHEAT futures in Chicago were marginally higher on speculation that harvest delays will continue to hurt or damage crops that have already been devastated by months of drought, brokers say.
Kansas, the biggest producer of US grain, has seen six times the normal amount of precipitation in the past two weeks. This amount of heavy rainfall has been preventing farmers from using heavy machinery in muddy fields.
On Tuesday, both July and December wheat futures gained three-quarters a cent per bushel.
However, the large global supply situation and reports that US spring wheat crops are looking good limited the advances.
– Wheat futures fall less than previously estimated due to concern that supplies from Ukraine may be curbed and the US will have a small crop.
– Wheat climbed to a 14-month high in May before tumbling into a bearish market this month as increasing supply in Europe compensated for a drop in US production.
Settlement prices are in Canadian dollars per metric ton.
