By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
August 13, 2014
Winnipeg – ICE Futures Canada canola held range-bound on Wednesday, settling near unchanged as the market saw some consolidation after recent declines.
Continued weakness in CBOT soybeans, following Tuesday’s record large soybean production estimate from the USDA, was a bearish influence overhanging the Canadian market. However, canola held it’s own relative to soybeans as supportive technical signals and a lack of significant farmer or fund selling helped underpin the futures, according to participants.
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Mounting dryness concerns in some parts of Western Canada provided some further support, as traders continue to try and get a handle on the size of the canola crop. Statistics Canada releases its own production estimates on August 21.
About 15,558 canola contracts were traded on Wednesday, which compares with Tuesday when 13,840 contracts changed hands. Spreading accounted for 3,430 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended 10 to 15 cents US a bushel lower on Wednesday.
Expectations that US soybean production will exceed Tuesday’s USDA estimate of an already record large 3.82 billion bushels weighed on prices, analysts said.
Forecasts calling for beneficial weather in US soybean growing regions this week were also behind the declines.
However, expectations that Thursday’s weekly export sales data will show good demand for US soybeans limited the downside, as did ongoing worries about tight old crop supplies in the US.
SOYOIL futures were down sharply, with weakness in outside oilseeds behind the declines, traders said.
SOYMEAL futures finished mixed on Wednesday, with good demand providing support and spillover pressure coming from the weakness in soybeans.
Bull spreading was also behind the mixed activity, brokers noted.
CORN futures in Chicago settled half a cent lower to one-and-a-half cents higher Wednesday.
Prices continued to find some support from Tuesday’s USDA report, which showed lower than expected stocks and production for US corn, analysts said.
On the other side, a lack of fresh demand news for US corn supplies and good weather expected in the US Midwest were bearish.
Expectations that the USDA will increase their 2014/15 US corn production estimate in upcoming reports also weighed on values.
WHEAT futures were lower, with Chicago, Minneapolis and Kansas City futures ending three to 10 cents US a bushel lower.
The USDA’s estimates for a larger US wheat crop and bigger global ending stocks continued to overhang the market.
Good conditions for crop development and harvest in the US were also helping to undermine the market, participants said.
However, steady commercial demand helped to limit the declines, as did ongoing worries about excess moisture in parts of Europe.
• The United Kingdom imported 2.21 million tonnes of wheat in 2013/14 (July/June), which was higher than expected. Exports of the commodity were the worst in 20 years, reports showed.
• The harvest of spring wheat in South Dakota is falling way behind, with only 11 per cent of the crop combined as of August 10, down from 19 per cent last year and the average of 55 per cent.
• Exports of wheat and rice out of India could fall by about 15 per cent this year due to more competition from lower prices in global markets, according to reports.
Settlement prices are in Canadian dollars per metric ton.
