By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 13 – THE ICE Futures Canada canola market finished narrowly mixed on choppy trading Monday.
Losses in US soybeans and soymeal pushed the nearby May contract below unchanged.
The ongoing soybean harvest in South America added to the bearish tone.
Trading action was volatile with the old crop contracts initially lagging the US markets in the early going, according to a trader.
However, the Canadian dollar was slightly weaker against its American counterpart which gave the more-deferred contracts some support as the lower dollar made canola more attractive to international buyers.
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US soyoil was slightly higher for most of the day which helped to underpin the market.
Commercial demand remains solid and there are continued concerns about a lack of soil moisture in Western Canada.
Around 16,978 canola contracts were traded on Monday, which compares with Friday when around 20,049 contracts changed hands.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down by two to three cents per bushel on Monday, hitting their softest levels in six months as bearish technical signals weighed on values.
The large US supply situation, together with the big South American supplies currently finding their way to export positions, added to the softer tone in beans, according to traders.
The losses in wheat and corn also put some spillover pressure on soybeans.
SOYOIL futures settled with small losses on Monday, retreating from earlier advances by the close.
SOYMEAL futures were Monday, following soybeans.
CORN futures in Chicago were down 5 to 7 cents per bushel on Monday, taking some direction from the sharp losses in wheat.
Generally favourable weather conditions for spring seeding across most of the Midwest contributed to the softer tone, according to participants.
However, there are some areas where excessive moisture will likely cause planting delays, which helped temper the declines.
WHEAT futures in Chicago were down 22 to 24 cents per bushel on Monday, with much needed rainfall across some of the dry parts of the southern Plains over the weekend behind the selling pressure. Minneapolis futures were down by 19 to 20 cents, and Kansas City futures were down by as much as 29 cents per bushel.
While more moisture will still be needed, the precipitation was enough to trigger a round of selling in wheat.
A stronger tone in the US dollar index was also bearish for wheat, as the rising currency makes US exports even less attractive to international buyers.
Bearish chart signals contributed to the declines, as the market settled just above nearby support.
– The USDA’s weekly crop report, due out after Monday’s close, is expected to show a downgrade in the country’s winter wheat conditions. Spring wheat plantings are generally forecast at up to 10% complete.
– Kraft Foods is being sued by a Texas man over claims that the company manipulated the CBOT winter wheat futures in November and December of 2011. The lawsuit claims that Kraft’s long position was above the lawful limit at the time, which “seriously distorted prices.”
