By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
June 3, 2014
Winnipeg – ICE Futures Canada canola contracts were mixed at Tuesday’s close, recovering from earlier declines to post a small gain in the nearby July contract.
Fund long liquidation weighed on prices for most of the day, as bearish chart signals encouraged some speculative selling, according to participants.
Losses in CBOT soybeans and the relatively favourable weather conditions across most of Western Canada also weighed on values.
However, the selling backed away late in the day and canola managed to settle well off its session lows. Oversold price sentiment, the weaker Canadian dollar and end-user bargain hunting were all supportive, according to traders. Continued reports of seeding delays in some parts of the Prairies, due to excessive moisture, also helped underpin the futures.
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About 23,768 canola contracts were traded on Tuesday, which compares with Monday when 30,561 contracts changed hands. The July/November spread trade was a feature of the activity.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Monday’s close.
SOYBEAN futures at the Chicago Board of Trade were eight to
19 cents per bushel lower on Tuesday as rain forecasts for the next two weeks indicate soil moisture will be greatly improved. Approximately 78% of the US soybean crop was seeded, as of Sunday. That is ahead of the five-year average of 70%.
Speculative long liquidation weighed on the market, according to an analyst.
Domestic demand is still solid but ideas continue to swirl around that export demand is slowing, an analyst said.
SOYOIL futures were slightly higher on Tuesday.
SOYMEAL futures were lower following soybeans.
CORN futures in Chicago dropped three to seven cents per bushel on Tuesday after a USDA report showed the domestic crop is in better condition than expected. Around three-quarters of the US corn crop was in good or excellent condition as of Sunday. That is ahead of earlier projections that just 65 to 70% of the crop would come in the good to excellent category.
More rainfall than normal is expected to fall in a line from Nebraska to Illinois over the next six to 10 days, according to a private weather forecaster.
The ethanol market could ease if crude oil remains weak, an analyst said.
WHEAT futures in Chicago ended seven to nine cents per bushel lower Tuesday, and 11 to 13 cents in Kansas City, on signs of rising global production and favourable weather in the US.
Weather forecasts call for heavy rains across much of the Midwest. Soil moisture should improve significantly, according to reports. However there is also the threat of excessive standing water, which could lead to replanting in certain areas.
Downward pressure from the drop in corn prices also weighed
on values, according to a report.
– Australia’s weather bureau said Tuesday it expects a return
of the El Niño weather system by August. The weather event is
expected to pose problems for wheat production in that country.
– The Philippines is reportedly shopping around for wheat
supplies from Australia, India or the Black Sea region.
– Continued dry weather in Kazakhstan is putting traders on
high alert for possible production declines, according to an
analyst.
Settlement prices are in Canadian dollars per metric ton.
