By Terryn Shiells and Marney Blunt, Commodity News Service Canada
WINNIPEG, August 7 – ICE Futures Canada canola contracts ended slightly lower on Thursday, undermined by spillover pressure from the weakness in Chicago soyoil futures. Soybeans in Chicago finished mixed.
Worries about Russia adding to their list of banned agricultural products from countries that have sanctions against them were also bearish, analysts said.
Good weather for canola in Western Canada and soybeans in the US Midwest this week further undermined prices.
However, a lack of significant farmer selling, as they wait for stronger prices, provided support for prices.
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Steady demand, the need to keep a weather premium built into the market and the weaker Canadian dollar were also bullish.
About 9,478 contracts traded on Thursday, which compares with Wednesday, when 11,506 contracts changed hands. Spreading was responsible for the bulk of the activity, accounting for 7,064 of the trades.
Milling wheat, durum and barley futures were untraded, though wheat prices were moved slightly higher after Thursday’s close.
SOYBEAN futures in Chicago closed mixed on Thursday, despite favourable weather in the U.S. Midwest and in the Plains, analysts say.
The most critical growing stage for oilseeds is in August, traders say. Oilseeds are planted later than other crops such as corn. Cool, wet weather during the month will be ideal for plant development.
There is some concern in the market over the latest move by Russia to ban food imports from U.S., Europe, Australia and Canada. Meanwhile, U.S. equity markets grinded higher throughout the morning hours and back toward yesterday’s high.
SOYOIL futures in Chicago closed lower on Thursday.
SOYMEAL futures were mixed on Thursday, keeping a slight spread with soybean oil.
CORN futures in Chicago fell Thursday on speculation that precipitation in the next five days will improve crop prospects, traders say.
Scattered rainfall and thunderstorms in the next ten days and below-normal temperatures in the U.S. Midwest and northern Great Plains are expected to improve crop prospects, according to forecasters. A week of dry weather pushed down corn ratings, which fell to 73 per cent rated as good or excellent as of Sunday in comparison with 75 per cent the previous week, according to the U.S. Department of Agriculture (USDA).
In parts of the U.S. Corn Belt, ranging from South Dakota to Illinois, as much as six times the normal amount of rain has fallen in the past week, according to the National Weather Service. This has improved soil conditions after little rain fell last month.
U.S. exporters sold 120,900 metric tonnes of corn for delivery in the 2013/14 season that ends on August 31, on the low end expectations, the USDA reported on Thursday. This may also be a factor in pressuring prices, traders say.
WHEAT futures in Chicago were down on Thursday after rising to the highest settlement price in more than a month the day prior, brokers say.
The harvest of grain in Europe will likely speed up soon, as drier weather is forecast for next week in areas where excessive rainfall has slowed the harvest and damaged the quality of the wheat.
Wheat volume has been exceptional the last six days, with futures and options coming well over 100,000 contracts per day which is the top-end of the average volume range since early July.
• Prices for Bulgarian wheat from the 2014 crop will be five to ten per cent lower than this time last year due to a rich world crop and high opening stocks in the season.
• The Ministry of Agriculture of Spain continues to assess the production of wheat in the country in 2014 at 5.5 million metric tonnes in comparison with last year’s harvest of 6.7 million metric tonnes.
• In France, heavy rain throughout the first half of July has led to concerns about milling wheat quality.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
