By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, March 26 – THE ICE Futures Canada canola market finished weaker on Thursday, due to a combination of spillover pressure from US soybeans and soymeal along with some speculative selling.
Some speculators likely liquidated their long positions in the lead-up to the release of the USDA’s planting intentions report, which is due out on Tuesday, according to a trader. He said some probably felt the need to take profits today for fear next week would be too late.
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There are widespread ideas the report will show a rise in soybean acreage which could have an impact on canola.
The trader also suggested that some farmers may have been active today as well.
“Maybe people are starting to decide that with seeding a month away it’s time to start selling some more canola.”
On the other side of the coin, US soyoil, Malaysian palm oil and European rapeseed futures were all stronger which helped to limit the losses.
Commercial demand remains steady and there are concerns about dryness in Western Canada which helped to underpin values.
Around 27,484 canola contracts were traded on Thursday, which compares with Wednesday when around 24,540 contracts changed hands. Spreading accounted for 19,046 of the contracts traded.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down by one to four cents per bushel on Thursday, as expectations for large US plantings this spring weighed on values and traders positioned themselves ahead of next week’s USDA prospective plantings report.
The large South American crop remained a bearish influence in the background as well, as those beans will eventually compete with US stocks in the export market.
However, weekly US soybean export sales, of 505,800 tonnes, were well above the previous week’s level and helped temper the declines.
SOYOIL futures settled higher on Thursday, as a rally in crude oil spilled over to underpin the vegetable oil markets as well.
SOYMEAL futures were mostly lower on Thursday, following soybeans.
CORN futures in Chicago were three to four cents per bushel lower on Thursday, as large losses in wheat spilled over to weigh on values. Profit-taking following recent advances was also a factor, according to participants.
Disappointing weekly US corn export sales also put some pressure on the market, as demand was down from both the previous week and the four-week average.
However, ongoing concerns over planting delays in the southern Corn Belt were supportive. Gains in crude oil also helped temper the declines, given the grain’s connection with ethanol production.
WHEAT futures in Chicago were down by 17 to 20 cents per bushel on Thursday, as poor weekly export sales and improving US crop prospects weighed on values. Chart-based selling contributed to the gains, with the nearby May contract settling below the psychological US$5.00 per bushel mark.
The USDA reported weekly US wheat export sales of only 102,300 tonnes for delivery during the current crop year. That marked the lowest total of the crop year to date and was well off the average.
Forecasts are calling for much needed moisture across some of the drier areas of the US Plains, which will help the winter wheat crops there. However, analysts said some of the drier areas may miss out on the precipitation.
– US spring wheat plantings are forecast at anywhere from 12.5 million to 14.5 million acres, which would compare with the 13.0 million acres seeded in 2014. Durum estimates range from about 1.5 million to 2.3 million, which would be up from the 1.4 million seeded the previous year. The USDA releases its acreage forecasts on March 31.
– Russia’s agriculture minister is now estimating that only 16.8% of the country’s winter grain crop was lost this year, which was down from earlier estimates anticipating a 21% loss. The agriculture ministry is also forecasting total grain production in the country for 2015 of up to 100 million tonnes.
– Pakistan is sitting on excess wheat stocks and officials in the country are now discussing measures to sell the surplus wheat.
