By Terryn Shiells and Jade Markus, Commodity News Service Canada
Winnipeg, July 28 – Canola contracts on the ICE Futures Canada trading platform ended slightly higher on Tuesday, after a day of choppy activity.
Support came from ideas that the market was oversold after Monday’s sharp declines, according to analysts.
Concerns about too much rain falling in parts of Western Canada on Monday and Tuesday added to the bullish tone, as did strength in the CBOT soy complex.
Expectations that ending stocks will be tight for Canadian canola in 2015/16 (Aug/Jul), as unfavourable weather has lowered production prospects, also kept a firm floor under the market.
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However, the sharp upswing in the value of the Canadian dollar limited the gains, as it made canola more expensive to foreign buyers and domestic crushers.
Improving weather conditions for US soybean crops, the large global oilseed supply situation and worries about economic problems in China slowing demand from the country were also bearish.
About 21,907 contracts traded on Tuesday, which compares with Monday when 28,863 contracts changed hands. Spreading accounted for 7,280 of the trades.
Milling wheat, barley and durum futures were all untraded, though the Exchange adjusted wheat and barley prices following Tuesday’s close.
SOYBEAN futures at the Chicago Board of Trade closed ten to 14 cents higher on Monday as an unchanged report on the crop’s conditions kept prices supported.
A US Department of Agriculture report pegged soybean crops at 62 per cent in good or excellent condition, the same as the week prior.
However, future prices could be undermined by a healthy crop in Brazil, analysts say.
SOYOIL prices settled stronger on Tuesday following neighbouring markets.
SOYMEAL closed higher on Tuesday following nearby markets.
CORN futures closed one to three cents per bushel stronger on Tuesday, rebounding from lows seen previously in the day.
Prices were supported by reports that heavy rain fall in June may have caused damage to crops in the US Farm Belt.
However, weather conditions in the US Midwest have turned dryer, which is favourable at this point in the growing season.
Dryer conditions in the US after a wet June and July could give corn crops a boost toward producing a healthy crop, analysts say.
WHEAT futures in Chicago closed eight to ten cents per bushel stronger Tuesday on higher than expected export reports.
The USDA’s weekly export inspection, released Monday, was at 439,330 tonnes, which market watchers say is more than anticipated.
Despite the bullish report, many analysts say US wheat is not competitive globally, and the crop doesn’t have a high demand, which is bearish.
A favourable weather outlook for both the US and Canada could have a bearish effect on prices in weeks to come.
• Analysts say India is placing a ten per cent import duty on wheat.
• Wheat export inspections were above analyst expectations, but below the 500 MT needed to reach the USDA’s 950 million bushel projection, market watchers say.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
