By Dave Sims and Jade Markus
Winnipeg, August 4 – The ICE Futures Canada canola market posted gains Tuesday as the Canadian dollar was sharply weaker relative to its US counterpart. A weaker loonie made canola more attractive to out-of-country buyers. Light volumes served to exaggerate the gains.
The Canadian dollar dropped below the psychologically important barrier of 76 cents US, which was bullish for canola values.
Although recent rains have improved crop conditions there are still significant concerns about the state and volume of the
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US soybeans and European rapeseed futures were stronger on the day which added to the gains.
However, US soyoil and Malaysian palm oil were both lower which limited the advances.
Traders have also taken the weather premium out of the market, which was bearish for prices, according to a trader.
Large world-wide supplies of soybeans overhung the market.
Around 12,459 canola contracts were traded on Tuesday, which compares with Friday when around 16,477 contracts changed hands. The Canadian market was closed on Monday for a Civic Holiday. Spreading accounted for 3,648 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 closed one cent per bushel lower to seven cents per bushel higher, with losses only in the August contract on Tuesday as a dry outlook for the US Midwest supported prices.
Prices were also buoyed by improvement in China’s economy. China had cancelled an order for soybeans last week, indicating a lack of demand, which is bearish.
But improvement in the country’s economy indicates the potential for increased soybean exports, as China is the largest importer of oilseeds globally, traders say.
However, the USDA raised its weekly rating for soybeans in the ‘good to excellent’ category by one point, which indicates crops are, if only slightly, improving after sitting unchanged for two weeks.
SOYOIL prices settled weaker on Tuesday.
SOYMEAL closed mixed, but mostly stronger, following soybean futures.
CORN futures closed stronger two to three cents per bushel higher on Tuesday, also supported by a dry Midwest forecast.
Dryness is welcomed by producers at this point in the growing season, but too much could cause damage to crops which already have shallow roots from excess moisture earlier in the growing season, analysts say.
Higher crude oil prices provided support for the crop, as it makes ethanol production more appealing to producers.
WHEAT futures in Chicago closed two to six cents per bushel lower on Tuesday, as high global supplies and a lack of demand for US wheat continued to have a bearish effect on prices.
Despite drought conditions in Canada, and heavy rains in the US, global wheat supplies are still ample, analysts say.
Though, strength in corn spilled over to provide some support and limit losses.
– Dryness is affecting wheat crops in Europe, Canada and Argentina, market watchers say.
– According to analysts, spring wheat harvest should be progressing this week, crops have been reported as higher protein than expected.
