By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, September 3 – THE ICE Futures Canada canola market dropped lower, after a new report from Statistics Canada indicated there were much more canola in the country than anybody thought.
According to StatsCan’s Stocks of Principal Fields Crop report, Canada had 2.3 million tonnes of canola in its overall stocks as of July 31, 2015. That was significantly higher than what analysts had been predicting heading into the report. The agency also adjusted its totals for the season before. As of July 31, 2014, Canada’s supplies were pegged at 3 million tonnes, which is 600,000 more than the previous forecast.
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“That number that comes out means we have less exports than we were anticipating for our traditional customers like Pakistan, Mexico; China with its economic woes has probably backed off as well,” a trader said.
The Canadian dollar was also higher relative to its US counterpart, which made canola less attractive to foreign buyers.
New cash crop deliveries are becoming more frequent as the harvest progresses, an analyst said.
However, ideas that the losses are overdone helped to mitigate the damage.
Once the initial shock from the StatsCan report wears off, canola should start to follow US markets again, a trader said.
Around 34,752 canola contracts were traded on Thursday, which compares with Wednesday when around 18,345 contracts changed hands.
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 were four to five cents lower at Thursday’s close, retreating from earlier advances as relatively favourable US crop conditions and rising production prospects weighed on values.
Speculative selling contributed to the declines, although the most active November contract managed to hold above nearby support.
Solid export demand did help limit the losses, with weekly new crop sales topping trade guesses at over 1.5 million tonnes.
SOYOIL settled near unchanged on Thursday.
SOYMEAL futures were down on Thursday.
CORN futures in Chicago were down by three to six cents per bushel on Thursday, with the good US production prospects also behind some of the selling pressure.
Private forecasters Informa Economics released updated estimates today, raising their expectations on the size of the US crop.
Harvest operations are starting up in the southern US, which put further pressure on the corn market.
Weekly US corn export sales came in at the low end of trade guesses, which contributed to the declines.
WHEAT futures in Chicago were down by 11 to 16 cents per bushel on Thursday, as overpriced US wheat continues to see the country miss out on export opportunities.
Bearish chart signals contributed to the declines, as wheat fell to fresh contract lows and the peculative selling built on itself.
– Farmers in Ukraine have harvested 37.1 million tonnes of grain as of September 2, which represents about 71% of intentions, according to the country’s agriculture department. Corn accounted for the bulk of the harvest so far.
– Canadian wheat stocks, as of July 31, were pegged at 7.1 million tonnes by Statistics Canada. That was at the high end of trade guesses and compares with the 10.4 million tonnes on farms and in commercial hands at the same point the previous year.
