By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
WINNIPEG – ICE Futures Canada canola contracts ended lower on Friday, with the July contract breaking below the support level of C$460 per tonne, as the market followed the sharp declines seen in Chicago soyoil futures.
Spillover pressure also came from the declines seen in Chicago soybeans, Malaysian palm oil and European rapeseed futures, analysts said.
The large Canadian canola supply situation added to the bearish tone, as did signs of improving weather for the upcoming Canadian canola crop.
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Recent sharp declines also turned the market’s technical bias lower, which accounted for some of the price softness.
However, continued ideas that canola is undervalued compared to competing oilseeds limited the declines, as did slow farmer selling.
The need to keep a weather premium built into the futures, as there are still enough concerns about planting delays in Western Canada, was also supportive.
About 16,727 canola contracts were traded on Friday, which compares with Thursday when 18,316 contracts changed hands. Spreading was a feature of the activity.
Milling wheat, durum and barley futures were untraded following revisions after Thursday’s close.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade settled five to thirteen cents per bushel lower on Friday, retreating from earlier gains as speculative selling weighed on prices.
Solid export demand did provide some support early in the day, as weekly US sales topped expectations for both old and new crop beans. The USDA reported that 60,000 tonnes of soybeans were sold for delivery during the current marketing year and over 800,000 tonnes for 2014/15.
However, soybeans were unable to hold onto their gains, with the good Midwestern crop prospects behind some of the eventual weakness.
Large losses in soyoil were also bearish for prices.
SOYOIL futures were down sharply on Thursday, with continued weakness in Malaysian palm oil behind some of the selling pressure.
SOYMEAL futures were narrowly mixed on Friday, with gains in the front months and losses in the more deferred positions.
CORN futures in Chicago were down two to six cents per bushel on Friday, as favourable weather conditions for the US corn crop weighed on values ahead of the weekend.
With corn planting nearing completion across the Midwest, conditions for the developing crops look reasonably favourable, according to market participants.
Solid export demand did provide some underlying support, helping temper the declines.
Chicago, Kansas City and Minneapolis wheat futures all settled one to eight cents per bushel lower on Friday, seeing a continuation of the selling pressure that’s weighed on wheat values all week.
Dry areas of the hard winter wheat growing regions of the US Great Plains have received more moisture in the past week than the previous six months combined, according to reports. The moisture should boost yield prospects in the region. Soft wheat in the Midwest has also received beneficial moisture recently.
Large global wheat crops, including in Canada, weighed on wheat prices as well.
End user bargain hunting and ideas that prices were starting to look oversold did provide some support.
• Forecasts calling for dry and warm conditions across some northern regions of the Former Soviet Union wheat belt will stress crops in the region, according to a report from CWG Weather. Meanwhile, rains in Ukraine and south-western Russia will help boost yield prospects there.
• US wheat exports for the 2013/14 crop year, which ends May 31, are on pace to hit the USDA’s projected total of 32.3 million tonnes, according to a report from the US Wheat Associates. Total exports as of May 15, at 31.8 million tonnes, were already well ahead of the 27.4 million tonnes sold during the 2012/13 season.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
