By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
April 24, 2014
Winnipeg – ICE Futures Canada canola contracts were higher on Thursday, seeing a bit of a recovery following the sharp declines posted earlier this week as the market reacted to Statistics Canada’s first acreage estimates of the year.
Farmers intend plant 19.8 million acres of canola in 2014, versus 19.9 million in 2013, according to the StatsCan planting intentions report. Most traders and industry participants had been forecasting an increase of at least a million acres, and the fact that farmers were basically unchanged in their intentions provided a boost for the futures.
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Canola is also still cheap compared to most other oilseeds and oversold price sentiment provided some further support for the futures, according to participants.
On the other side, Canada’s large old crop canola supplies continue to overhang the market. A relatively softer tone in the CBOT soy complex for most of the session also tempered the upside potential in canola.
About 34,509 canola contracts were traded on Thursday, which compares with Wednesday when 37,723 contracts changed hands. Spreading was a feature, accounting for 29,306 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade closed one to nine cents US a bushel higher on Thursday, reacting to better than expected US soymeal export sales data, analysts said.
The USDA’s weekly export sales report showed 186,300 tonnes of soymeal were sold during the week, beating expectations. The figure was also higher than last week, and the four-week average.
Continued worries about tight old crop supplies, steady commercial demand and ideas that recent losses were overdone were also supportive.
However, new crop soybean sales were disappointing in the USDA’s report at 4.34 million bushels, which limited the upside, brokers said.
Continued worries about Chinese cancellations and reports of South American soybeans moving into the US were also bearish.
SOYMEAL futures closed higher, reacting to better than expected weekly export sales data from the USDA, market watchers said.
SOYOIL futures were up slightly, following the gains seen in soybeans and soymeal, brokers said.
CORN futures in Chicago settled one to four cents US a bushel lower on Thursday, undermined by profit taking following recent gains.
Ideas that farmers in the US still have plenty of time to get their corn crops planted were also bearish, industry officials said.
However, worries that rain forecasted for the US Midwest this weekend will keep farmers out of the fields limited the losses, as did steady demand for the US commodity.
WHEAT futures in the US ended stronger amid reports that rainfall won’t be as beneficial for winter wheat crops in the US Plains this week as first anticipated. Minneapolis, Kansas and Chicago futures settled 12 to 15 cents US a bushel stronger.
Chart-based buying and continued worries about political problems in Ukraine disrupting wheat exports and production in the country added to the bullish tone.
However, the large global supply situation continued to overhang the futures.
• Statistics Canada pegged 2014/15 (Aug/Jul) all wheat acreage at 24.94 million acres, including winter wheat seeded in the fall, or 24.77 million acres when accounting for the winter wheat that didn’t survive the winter.
• Weekly export sales in the US totalled 610,800 tonnes, with 339,100 tonnes for delivery in 2013/14 and 271,700 tonnes for 2014/15, the USDA reported.
• South African wheat area is expected to drop by one per cent, to 1.2 million acres this year, the country’s Crop Estimates Committee said, adding that low prices are behind the anticipated drop in area.
Settlement prices are in Canadian dollars per metric ton.
