By Terryn Shiells, Commodity News Service Canada
WINNIPEG, July 30 – ICE Futures Canada canola contracts ended lower on Wednesday, following the declines seen in Chicago soybean and soyoil futures, analysts said.
Ongoing expectations that the 2014/15 US soybean crop will be record large also weighed on prices.
Further downward pressure came from forecasts calling for improving weather across Western Canada this week.
However, ongoing concerns about yield losses due to excess dryness and moisture in parts of Western Canada this year were supportive.
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The sharp downswing in the value of the Canadian dollar, which was down almost half a cent against the US dollar, was also bullish. The weaker Canadian currency makes canola more attractive to crushers and exporters.
About 15,490 contracts traded on Wednesday, which compares with Tuesday, when 14,099 contracts changed hands. Spreading accounted for 8,512 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchanged adjust wheat prices after Wednesday’s close.
SOYBEAN futures at the Chicago Board of Trade closed lower on Wednesday, settling with losses of six to 20 cents a bushel.
Forecasts calling for beneficial rainfall in the US Midwest next week were bearish, as it would help solidify a record large production for the US crop, analysts said.
However, some support came from steady demand for soybeans and products, as the USDA announced a sale of 135,000 tons of soybean cake and meal to an unknown destination for 2014/15 delivery yesterday.
SOYOIL futures were also weaker, following the losses seen in soybeans.
SOYMEAL futures closed sharply lower, undermined by follow-through selling on recent losses, brokers said.
CORN futures in Chicago settled little changed, with prices finishing unchanged to half a cent per bushel higher on Wednesday.
Spillover pressure from the losses in soybeans and beneficial weather expected in the US Midwest for the first half of August helped to weigh on prices.
On the other side, oversold price sentiment and news of fresh export demand from Colombia helped to support values, traders said.
Worries about possible lower production in Ukraine, due to political problems in the country, were also bullish.
WHEAT futures were stronger, with Chicago, Minneapolis and Kansas City futures seeing gains of one to seven cents US per bushel.
Sentiment that Tuesday’s losses were overdone helped to lift prices, analysts said.
Talk that sanctions from the US and European Union against Russia may make it harder for Russia to export wheat supplies helped to underpin values as well.
News of fresh export demand, oversold price sentiment and worries about lower planted area in South Africa and Argentina added to the bullish tone.
However, pressure from the advancing US winter wheat harvest and continued good conditions for the spring wheat in the country were bearish.
• Wheat prices in Bulgaria will likely be 10 per cent lower in 2014 compared to 2013 due to large supplies and a good crop so far, according to the Chief Executive Director of the Sofia Commodity Exchange.
• Egypt reportedly purchased 175,000 metric tonnes of wheat from Russia.
• Argentine wheat acres are now expected to total 1.03 million acres, from a previous estimate of 1.1 million due to excess moisture in some parts of the country, the Buenos Aires Cereal Exchange said.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
