By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, May 20 – The ICE Futures Canada canola market finished stronger Thursday, as concerns mounted about recent cold, wet weather in Western Canada that brought frost to some regions.
Traders are still assessing how much damage was done over the weekend by the frost in Western Canada. Some reports say temperatures dipped as low as -5 (Celsius) to -7 (Celsius).
A revision in the 2015/16 canola ending stocks also pushed values higher. Agriculture and Agri-Food Canada’s latest supply/demand tables, peg the forecasted canola carryout at 500,000 tonnes which is significantly lower than the earlier estimate of 1.4 million tonnes.
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Advances in Malaysian palm oil, US soymeal and soyoil helped to underpin the market while farmer selling was also sluggish which was supportive for values.
However losses in Chicago soybeans limited the gains.
Large world supplies of soybeans also cast a bearish influence over the market.
Around 18,591 canola contracts were traded on Thursday, which compares with Wednesday when 23,069 contracts changed hands. Spreading accounted for 10,714 of the contracts traded.
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 down by one to three cents per bushel on Thursday, after chopping around both sides of unchanged in relatively narrow dealings.
The large South American crop and good US production prospects were both bearish for prices, according to analysts.
Soft weekly export sales data and expectations for continued softness on the export front also weighed on values.
However, oversold price sentiment, and spillover from the gains in wheat and corn, provided some underlying support.
SOYOIL settled steady to slightly higher on Thursday, with positioning against soymeal providing some support.
SOYMEAL futures settled narrowly mixed on Thursday.
CORN futures in Chicago settled two to five cents per bushel higher on Thursday, taking some direction from the rally in wheat.
End-user bargain hunting contributed to the gains, although the upside was limited by the relatively favourable US production prospects.
WHEAT futures in Minneapolis and Chicago were up by seven to ten cents per bushel on Thursday, while Kansas City futures were up as much as 13 cents, as mounting weather concerns across the US Plains provided support. Some chart stops were hit on the way up, adding to the firmer tone.
Excessive moisture in parts of the southern Plains could be hampering yields and quality at harvest time, while forecasts calling cold temperatures in other wheat growing regions of the US were also keeping some caution in the futures.
However, large global supplies and a continued lack of significant export demand for US wheat did remain bearish overall.
– Weekly US wheat exports came in at 74,400 tonnes for old crop and 130,200 tonnes for new crop. While the old crop sales were the fourth smallest for the marketing year, the new 2015/16 crop year for wheat begins on June 1 and old crop commitments are already at 99% of expectations, according to USDA data.
– France’s Strategie Grains released a report pegging the 2015/16 European Union soft wheat crop at 142.6 million tonnes, which would be up by 1.2 million tonnes from an earlier estimate but still below the record 149.3 million tonnes grown the previous year.
– Egypt’s GASC has purchased 4 million tonnes of local wheat over the past month, which was above its target of 3.7 million tonnes. Officials say the country will continue to purchase wheat domestically until July.
