By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG – ICE Futures Canada canola contracts ended lower on Wednesday, despite forecasts calling for frost in some Prairie growing regions this week, as traders bet the adverse conditions wouldn’t do much damage to canola, analysts said.
Expectations that canola production will be larger than earlier expectations and some farmer hedging added to the bearish tone.
Selling ahead of Thursday’s monthly USDA production and supply and demand report and the unwinding of some canola/soy spreads further undermined values.
Read Also
Canadian Financial Close: Loonie virtually unchanged
By Glen Hallick Glacier Farm Media | MarketsFarm – The Canadian dollar remained firm on Friday, along with its United…
However, some spillover support came from the firmer tone seen in the Chicago soy complex on Wednesday.
Prices were testing recent lows during the session, but chart support held, preventing further downside.
Activity continued to be quiet, with only about 6,711 contracts traded on Wednesday, which compares with Tuesday when 8,412 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted milling wheat and durum prices after Wednesday’s close.
CORN futures in Chicago ended one cent per bushel higher Wednesday, as traders positioned themselves ahead of tomorrow’s monthly USDA report.
Values jumped as traders who had short positions in the market bought futures instead.
The USDA is widely expected to boost its corn production numbers in Thursday’s crop supply and demand report. Analysts estimate production at 14.288 billion bushels. That compares to 14.032 billion bushels in last month’s report.
Generally favourable weather conditions are expected to settle into the US Midwest over the next few days. However there is mild speculation that scattered rains could slightly delay harvest efforts in some regions.
SOYBEAN futures at the Chicago Board of Trade were slightly higher Wednesday, with some consolidation taking place ahead of Thursday’s USDA crop supply and demand report.
Investors are bracing for tomorrow’s report, which is expected to peg soybean production at 3.883 billion bushels, up 67 billion bushels from last month’s report. World ending stocks are also expected to jump from 430 million bushels to 455 million bushels, said a trader.
Northern Missouri and southern Iowa could do with less rain, said an analyst, who worried the wet weather was beginning to affect quality.
SOYOIL futures recorded gains on Wednesday, in sympathy with soybeans, said an analyst.
SOYMEAL futures dropped, with some spreading against soyoil, a feature.
WHEAT futures in Chicago ended six to eight cents per bushel lower on Wednesday, pressured by sluggish demand, a strengthening US dollar and expectations the USDA will increase its outlook for US wheat production in its monthly crop supply and demand report, due to be released tomorrow.
Analysts expect the USDA will peg world wheat ending stocks at 193.75 million tonnes in Thursday’s report. Last month, that figure was 192.96 million tonnes.
The USDA weekly crop progress report is widely expected to show a surge in harvest activity.
More rain is expected to fall in northern Texas and the Oklahoma Panhandle according to a private forecaster, which will improve planting conditions.
• The surging wheat crop in Britain, which is expected to hit 16 to 17 million metric tonnes, will make the country a net exporter of wheat, according to a report. In the past two seasons the country was a net importer of wheat due to weather issues.
• France has imported milling wheat for the first time in 13 years, said a trader.
• Germany’s wheat crop will increase by 12 percent to 27.9 million tonnes.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
