By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
September 4, 2014
Winnipeg – ICE Futures Canada canola contracts were weaker on Thursday, hitting fresh contract lows in the process as declines in CBOT soybeans provided the catalyst for more speculative selling.
The November canola contract fell below support at C$415 per
tonne in early activity, triggering sell-stops as fund traders added to their already very large short positions, said participants.
There was some scale down buying interest, but end users appeared content to watch the prices fall and were not aggressive on the buy side.
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While the losses in CBOT soybeans were behind much of the spillover weakness in canola, gains in soyoil did help temper the Canadian declines to some extent, said traders.
Positioning ahead of Friday’s Statistics Canada ending stocks report kept some caution in the market as well. In addition, persistent wet weather across much of Western Canada was leading to concerns over harvest delays and quality downgrades in some areas.
About 31,150 canola contracts were traded on Thursday, which compares with Wednesday when 26,296 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended 15 to 17 cents per bushel lower Thursday, continuing to feel pressure from a favourable USDA crop progress report and good growing conditions in the US.
There is speculation South America could heavily increase soybeans plantings too, according to an analyst.
North Dakota has a much larger crop this year than last year, analysts say, however recent forecast of cool weather for the area are causing concern for crop-watchers.
China has announced its soybean crop is expected to be 11.6 million metric tonnes smaller than last year, which also lent support to values.
SOYOIL futures were higher on Thursday, in concert with Malaysian palm oil.
SOYMEAL futures dropped sharply on Thursday, following soybeans, with spreading against soyoil a feature.
CORN futures in Chicago fell three to five cents per bushel lower Thursday, still feeling the effects of this week’s USDA progress report which called for a larger-than-expected harvest.
Weather reports in the US Midwest are calling for mild temperatures and scattered showers which is favourable for late-season crop development.
South Korea purchased 63,000 tonnes of corn from Brazil in an overnight tender, according to a report.
WHEAT futures in Chicago ended three to four cents per bushel lower on Thursday, due to an abundance of cheap supplies on the international market mixed with a strengthening US dollar.
Reports continue to persist that a cease-fire between Russian-back rebels and Ukraine could be called soon, which has cast a bearish tone over the market.
High freight costs continue to make US supplies uncompetitive to buyers in Africa and the Middle East, said traders.
The main stockpiling company for China says it has stored three times more wheat this year than last year, according to a report.
– One of Brazil’s top-producing wheat states reports it is nearly 11 percent finished harvest. The estimated volume is 437,800 tonnes with 85 percent of that considered good or excellent.
– Algeria imported 7.5 million tonnes of wheat in 2014/15, an all-time record, according to a report.
– Egypt’s top grain authority purchased its first tender of French wheat in nearly eight months.
Settlement prices are in Canadian dollars per metric ton.
