By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
September 16, 2014
Winnipeg – ICE Futures Canada canola contracts were weaker on Tuesday, as commercial hedges came forward to weigh on prices.
With improving weather conditions allowing harvest operations to move forward across Western Canada, the resulting hedges were also reported to be picking up in the futures market, according to participants.
Losses in CBOT soyoil put some spillover pressure on canola as well, as gains in that market had propped up the Winnipeg futures in recent days.
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A firmer tone in the Canadian dollar was another bearish influence, as the strengthening currency cuts into crush margins and makes exports less attractive, said participants.
On the other side, scale-down end user demand, chart support, and ongoing uncertainty over the size of this year’s canola crop help limit the losses.
About 19,231 canola contracts were traded on Tuesday, which compares with Monday when 13,338 contracts changed hands. Spreading accounted for 13,202 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended four to nine cents US per bushel lower on Tuesday, reacting to a bearish U.S. Farm Service Agency (FSA) report. The FSA upped 2014/15 US soybean acreage to 80.8 million acres, from their previous guess of 79.2 million acres.
Positive weekly crop condition ratings for the US soybean crop were also bearish. The USDA said 72 per cent of soybeans were good to excellent as of Sunday, unchanged from a week ago and much better than 50 per cent at the same time last year.
Continued expectations of record large 2014/15 US production further undermined values, though steady demand for the commodity was supportive.
SOYOIL futures were softer, undermined by profit taking on the rally seen during the previous two trading sessions, traders said.
SOYMEAL futures finished mostly lower, following the declines seen in soybeans, brokers said.
CORN futures in Chicago settled half a cent to one and a quarter cents higher on Tuesday, seeing an upward correction amid sentiment that the market is oversold, analysts said.
Steady commercial demand, solid domestic ethanol margins and speculative based buying added to the bullish tone.
The FSA pegged 2014/15 corn acreage at 84.8 million acres, up from their previous guess of 83.3 million, but below the National Agricultural Statistics Service’s most recent estimate of 91.6 million acres.
Some downward pressure came from the USDA’s weekly crop report, which said 74 per cent of the US corn crop is rated good to excellent.
WHEAT futures were lower, with Kansas City, Chicago and Minneapolis futures ending two to six cents US per bushel lower. The Chicago December contract broke below US$5.00 per bushel.
Continued follow-through selling on recent declines was bearish, as was a lack of fresh demand from the export market, brokers said.
News that good harvest progress was made for the US spring wheat crop last week further undermined values. The USDA said 74 per cent of US spring wheat was harvested as of Sunday, up from 58 per cent the week prior.
The USDA also pegged winter wheat planting in the US at 12 per cent complete, above the five-year average of 11 per cent finished.
• The FSA said 1.38 million acres of wheat weren’t planted in the US this year, up from last month’s guess of 1.36 million acres, but down from 2.01 million acres last year.
• Brazil imported 4.17 million tons of wheat in the first eight months of the year, mostly from the United States and Argentina, according to reports.
• Global wheat production was pegged at 714 million tons by the Australian government, which was higher than their previous guess of 696 million tons.
Settlement prices are in Canadian dollars per metric ton.
