By Phil Franz-Warkentin and Marney Blunt, Commodity News Service Canada
June 16, 2014
Winnipeg – ICE Futures Canada canola contracts were higher on Monday, as the Canadian market saw some independent strength relative to the US soy complex.
Follow through speculative buying interest after Friday’s rally, with some fund traders possibly buying canola and selling CBOT soybeans, provided some support for canola, according to a broker.
Weather concerns in parts of the Prairies underpinned the Canadian futures as well, with heavy rains in Manitoba over the weekend likely resulting in some unseeded acres and damage to already seeded fields, said traders. However, crop conditions are said to relatively favourable across the majority of Western Canada.
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The losses in the CBOT soy complex did put some spillover pressure on canola, tempering the upside potential.
About 13,025 canola contracts were traded on Monday, which compares with Friday when 17,627 contracts changed hands.
Milling wheat, durum and barley futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade (CBOT) settled lower in choppy trading on Monday, analysts say. July soybean futures closed 3 ¾ cents lower from Friday’s close and the November futures decreased by 5 ¼ cents on Monday.
The global equity market entered the new week under selling pressure, weighed down by escalating geopolitical violence in Iraq and the Ukraine, analysts say.
Favourable weather conditions for crop development across most of the U.S. Midwest contributed to the declines, said traders.
SOYOIL futures were slightly lower on Monday.
SOYMEAL futures were sharply lower on June 16.
CORN futures in Chicago corrected slightly lower on Monday, as the precipitation is helping to improve soil moisture levels for the majority of the corn crop.
Traders say about 75 per cent of U.S. corn was in good or excellent condition last week, which is the best rating for the second week since July 2010, according to government reports. That figure may rise this week after ample rainfall in key production areas, improving soil conditions.
Corn futures for July fell 5 ¾ cents a bushel. December corn futures were not too far behind, lowering 5 ¼ cents a bushel.
WHEAT futures in Chicago were generally lower Monday, following the pattern of corn market prices. Despite that speculative investors who were net-short were buying back contracts in anticipation of the wet weather delaying harvest and cutting back crop yields, brokers say.
A large global supply and mostly good crop conditions in key production areas may have kept wheat futures to the bearish side today.
Wheat futures for July dropped 5 ½ cents a bushel, while December futures dropped 6 ¼ cents a bushel.
World stockpiles for wheat are forecast to rise 188.61 million tonnes in the year that began June, up 186.05 million tonnes from the prior year, according to the U.S. Department of Agriculture (USDA).
The U.S. wheat output is forecast to be 1.94 million bushels, down from 1.96 million the previous year, according to the USDA.
U.S. wheat prices have been under heavy selling pressure in recent weeks due to market players liquidating long positions amid easing concerns over tightening supplies.
Settlement prices are in Canadian dollars per metric ton.
