By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
August 11, 2014
Winnipeg – ICE Futures Canada canola contracts were weaker on Monday, closing near their session lows as losses in the CBOT soy complex spilled over to weigh on values.
Positioning ahead of Tuesday’s USDA monthly supply/demand report was a feature in both soybeans and canola, with expectations for a record large US soybean crop weighing on the oilseeds, according to participants.
Chart-based selling contributed to the eventual losses in canola, with some stops hit on the way down. A firmer tone in the Canadian dollar was also bearish for canola.
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Scale-down end user demand did provide some underlying support for canola. Uncertainty over the size of the Canadian crop, with dryness starting to cause concerns in some regions, was also supportive, said traders.
About 10,752 canola contracts were traded on Monday, which compares with Friday when 8,940 contracts changed hands. Spreading accounted for 1,918 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade ended five to 12 cents US a bushel lower on Monday, undermined by expectations that the USDA will increase their US soybean production estimates in their monthly report due out Tuesday morning, analysts said.
Weakness in outside oilseed markets, including Malaysian palm oil, was also bearish for prices.
However, steady demand and ongoing concerns about tight old crop supplies in the US were supportive.
Traders will also be watching the USDA’s weekly crop report, due out late Monday afternoon. Some estimates call for a decrease in US soybean crop conditions, while others expect conditions to remain unchanged or improve slightly.
SOYOIL futures were down sharply, as Malaysian palm oil futures dropped to a fresh one-year low overnight, traders said.
SOYMEAL futures were slightly lower, following the losses seen in soybeans.
CORN futures in Chicago settled two to five cents a bushel higher Monday, lifted by worries about dryness in parts of Iowa, Minnesota, Illinois and Indiana, analysts said.
Expectations that the USDA may lower US corn crop condition ratings in their weekly report later Monday were also bullish, as were signs of improving demand for US corn.
However, expectations that Tuesday’s monthly USDA report will show a record large US corn crop estimate helped to limit the advances.
WHEAT futures were lower, with Chicago, Minneapolis and Kansas City futures ending two to six cents a bushel lower.
Easing worries about political problems in the Black Sea Region slowing wheat exports out of the region weighed on prices, brokers said.
Expectations that Tuesday’s monthly USDA report will be bearish for wheat also undermined prices, as did expectations of good US spring wheat crop conditions in the weekly USDA crop progress report.
However, worries about excess rain in parts of Europe harming wheat crops were supportive, as was positive weekly export inspections data from the USDA.
• According to the USDA, weekly export inspections for US wheat totalled 526,997 metric tons for the period ended August 8, up from 384,421 tons the week prior, but down from 664,145 tons in 2013.
• Grain exports out of Ukraine during the July 1 to August 8 period totaled 2.7 million metric tons, an increase of 60 per cent from the same period a year ago, the Ukraine Ag Ministry said.
• Private importers in Pakistan have reached a deal to purchase 500,000 tons of Russian wheat for delivery in mid-August.
Settlement prices are in Canadian dollars per metric ton.
