By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Aug 1 – ICE Futures Canada canola contracts ended sharply lower, as traders liquidated positions ahead of the long weekend. Canadian markets are closed on Monday, August 4 for a Civic Holiday.
Much of the weakness was linked to spillover pressure from the declines seen in the Chicago soy complex and European rapeseed futures, analysts said.
CWB’s estimate calling for an average western Canadian canola yield of 34.3 bushels an acre was also bearish, as it was in line with the long-term average despite problems with excess moisture in some regions, and excess dryness in others this year.
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Ongoing expectations of a very large 2014/15 US soybean crop also weighed on values.
However, weakness in the value of the Canadian dollar tempered the losses, as it made canola more attractive to crushers and foreign buyers.
Slow farmer selling, as they wait for better prices and more confidence in their new crop, was also supportive.
About 15,862 contracts traded on Friday, which compares with Thursday, when 10,437 contracts changed hands. Spreading accounted for 8,778 of the trades.
Milling wheat, durum and barley futures were untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade plunged 13 to
Mild temperatures and scattered rainfall in the Midwest is expected to limit heat stress on soybean acres. The lack of extreme heat in the Midwest is expected to limit yield losses, according to a brokerage firm. Mainly positive growing conditions continue to set high expectations for the current crop.
As of Monday, approximately 38% of the pods had been set, according to an analyst. That suggests much of the crop is in the middle of key yield development time further adding to expectations for a good crop.
SOYOIL futures were down following soybeans and weakness in Malaysian palm oil futures, traders said.
SOYMEAL futures were lower, reacting to the weather forecasts calling for favourable conditions in the US.
CORN futures in Chicago continued their steady downward trend, falling four cents per bushel, on favourable weather forecasts and indications of lukewarm demand.
Recent rains and a lack of heat in the Midwest is expected to lend stability to yields, according to an analyst, who added that declining moisture needs for the plant are extremely beneficial right now.
Export sales numbers from the USDA, released Thursday, fell short of analysts’ expectations.
Corn has now fallen for six consecutive weeks, losing 22 percent during that time.
Wheat futures in Chicago ended one to four cents per bushel higher Friday, on ideas of improving demand for US supplies.
Values were also aided by rain in Europe that has reportedly damaged wheat supplies in France and other wheat-growing nations within the EU. This development is lending to speculation that a growing number of countries will turn to the US for their supplies.
However, competitive bidding between Russia and the Ukraine could limit the upside, suggested an analyst.
The Canadian government has ordered its two main railways to begin carrying one million tonnes of wheat per week until late fall, which was also bearish.
• Turkey has issued a tender for 165,000 tonnes of milling wheat according to European traders. The move would be the latest in a string of large import purchases by Turkey.
• Argentina’s Wheat Association is confirming that the returns of the retentions made by the government on wheat exports are already being paid. Around 10,500 producers are entitled to receive the benefit. The payment system has been thrown into disarray following the country’s recent tilt towards default on their sovereign debt.
• Brazilian farmers in the prime wheat growing area of Rio Grande do Sul are reportedly 97 percent finished planting.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
