By Dave Sims, Commodity News Service Canada
Winnipeg, April 16 – The ICE Futures Canada canola market finished sharply lower Thursday – due to the strong Canadian dollar and liquidation selling.
Large funds started liquidating early today as they did not want to get caught in long positions, according to a trader.
“The market is definitely heavy on the canola. If you buy it, you can’t make a dime of it going long,” he said.
The Canadian dollar was stronger against its US counterpart which contributed to the declines, as it made canola less
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Scattered rain is forecast for some parts of Western Canada this weekend which was also bearish.
US soy oil was slightly weaker which added to the losses.
However investors were reluctant to sell ahead of the Statistics Canada planting intentions report which is due out next week while farmers hung onto supplies due to the proximity of spring planting.
European rapeseed futures were slightly higher which limited the losses.
Canola also took strength from soymeal which was slightly higher.
Around 36,918 canola contracts were traded on Thursday, which compares with Wednesday when around 37,644 contracts changed hands. Spreading accounted for 23,876 of the contracts traded.
Milling wheat, barley and durum were all untraded.
CORN was narrowly mixed on both sides of unchanged as seeding began in Illinois and Iowa.
Analysts expect the next crop progress report to show that serious planting progress has been made in the heart of the US
corn belt. One analyst said he expects 15 percent of the US crop is now in the ground, compared to just two percent last week.
However, the eastern Corn Belt in the US is still suffering from excess moisture and few planting efforts have even been
made yet.
SOYBEAN futures in Chicago ended relatively unchanged after chopping around for much of the day.
Better than expected demand for soybeans was supportive as the USDA said net soybean sales last week totalled 313,600
tonnes. That was up significantly from the previous week as well as the four-week average.
However, US stockpiles of soybeans are still expected to be four times larger at the end of the marketing year.
Crop yields in South America are also expected to be better than initially thought which weighed on the more-deferred
values.
SOYOIL futures in Chicago closed slightly lower on the day.
SOYMEAL futures ended slightly higher with spreading against soyoil a feature.
WHEAT futures in Chicago ended one to three cents per bushel higher on chart-based trading and some profit-taking.
The fund short position in Chicago is huge right now with over 100,000 contracts being held.
Forecasts for continued rain in the US Great plains were bearish as the moisture is expected to help the crop.
– Hard red spring wheat planting has begun in the US and
progress is ahead of last year and the five-year average
due to mostly drier conditions and warmer than average
temperatures throughout much of the region, according to
a report.
– The European’s Union’s latest farm subsidy payment for
headaches due to its overly complex eligibility
requirements.
– Kazakhstan wheat production in 2015 is forecast at 12.5
MMT, down slightly from 2014 production of 12.9 MMT,
participants say.
