By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
WINNIPEG, Sept 25 – ICE Futures Canada canola contracts were weaker on Thursday, as the November contract’s move above C$400 on Wednesday was short lived.
Much of the weakness was linked to spillover pressure from declines in US commodity markets, including the CBOT soy complex, corn and wheat, analysts said.
The price softness in canola was also linked to harvest pressure, as conditions have been very favourable in Western Canada this week.
A pickup in farmer selling and ideas that Canadian canola production will be larger than first anticipated were also bearish.
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The Canadian dollar was relatively steady on Wednesday. The loonie closed at US$0.7250 or US$1=C$1.3794, compared to US$0.7252 or US$1=C$1.3789…
However, some spillover support came from recent gains in Malaysian palm oil and European rapeseed futures.
The weaker Canadian dollar was also bullish, as it made canola more attractive to crushers and exporters.
About 20,072 contracts traded on Thursday, which compares with Wednesday when 23,948 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange moved wheat prices higher after Thursday’s close.
SOYBEAN futures at the Chicago Board of Trade were down nine to 14 cents per bushel on Thursday, hitting fresh four-year lows once again as good Midwestern weather conditions will help harvest operations.
Bearish technical signals contributed to the declines, as soybeans remain stuck in a steady downtrend from a chart standpoint, according to analysts.
End-user bargain hunting and oversold price sentiment were somewhat supportive. The USDA reported net weekly export sales of 2.57 million tonnes in the week ended September 18, which was up by a million tonnes from the previous week.
SOYOIL futures were steady to only slightly lower on Thursday, despite the bigger losses in soybeans. Gains in outside vegetable oil markets provided some support.
SOYMEAL futures were down on Thursday, following soybeans. Spreading against soyoil was another feature.
CORN futures in Chicago were down two to four cents per bushel on Thursday, as the good US crop prospects remained a bearish influence overhanging the market.
Good export demand on the other side did provide some support, with weekly US corn exports for the current marketing year coming in at 836,400 tonnes. The USDA also reported that an additional 270,000 tonnes were sold for delivery in the 2015/16 crop year.
WHEAT futures in Chicago were down four to six cents per bushel on Thursday, with poor demand and large world supplies overhanging the market.
Weekly US wheat export sales of just under 400,000 tonnes fell at the low end of trade guesses, and were seen as a sign that prices may still need to move lower in order to generate demand.
On the supply side, the International Grains Council upped their estimate on the size of this year’s global wheat production to 717 million tonnes, from 713 million in August.
• Russia’s grain harvest is forecast at over 100 million tonnes, with wheat accounting for about 56 million tonnes of the total, according to the country’s Agriculture minister. The crop would be the largest in six years, and would leave Russia with 27 million to 30 million tonnes of exportable surplus – with wheat accounting for 70% of the exports.
• Qatar is in the market to purchase European wheat, as country tendered to buy 40,000 tonnes from the region on Wednesday.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
