By Terryn Shiells, Commodity News Service Canada
Winnipeg, April 2 – ICE Futures Canada canola contracts closed lower after chopping around on both sides of unchanged on Wednesday.
Much of the weakness was linked to spillover pressure from the declines seen in Chicago soybean and soyoil futures, analysts said.
Expectations that carryout stocks of Canadian canola will be very large this year added to the bearish tone.
A pickup in farmer selling following recent gains and ahead of spring seeding also weighed on the futures.
Read Also
Canadian Financial Close: Loonie, crude oil give up ground
Glacier FarmMedia – The Canadian dollar retreated further on Thursday, one day after the Bank of Canada and the United…
However, good crusher demand, as crush margins are looking attractive, limited the losses, as did continued ideas that canola is undervalued compared to other oilseeds.
Optimism that grain movement in Western Canada is improving and the narrowing of basis levels in some areas were also bullish.
About 33,641 canola contracts were traded on Wednesday, which compares with Tuesday when 29,251 contracts changed hands. Spreading accounted for 22,142 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchange moved wheat prices lower after the close.
SOYBEAN futures at the Chicago Board of Trade were down sharply on Wednesday, losing 22 cents per bushel in the nearby May contract as speculative profit-taking following the recent gains came forward to weigh on prices.
Fund traders have built up a large long position in soybeans and were finally on the sell side booking some profits on Wednesday, according to traders. Losses in corn and wheat contributed to the selling pressure on soybeans.
Large South American crop prospects, together with the continued possibility of Chinese cancellations, put some pressure on values as well. However, tightening US supplies did remain supportive overall.
SOYOIL futures were down on Wednesday, retreating from earlier advances after running into upside resistance.
SOYMEAL futures were down on Wednesday.
CORN futures in Chicago were five to 12 cents per bushel weaker on Wednesday, with speculative selling a feature.
The move above the psychological US$5.00 per bushel level earlier in the week also uncovered some fresh farmer selling in the front month, which contributed to the declines, according to traders.
Spillover from the declines in wheat were also bearish for corn.
WHEAT futures in Chicago settled 11 to 16 cents per bushel lower on Wednesday, with reports of some much needed moisture in parts of Kansas behind some of the selling pressure.
Wheat crops in eastern Kansas are expected to benefit from shower activity, and the improving yield prospects in the major wheat producing state provided the catalyst for the selloff in all three US wheat markets. However, some of the driest regions of the Southern Plains were expected to miss out on the latest precipitation.
Speculative selling contributed to the declines, as values dipped below nearby support.
• Archer Daniels Midland (ADM) is looking to increase its share holdings in Australia’s GrainCorp after the country’s government blocked a takeover bid late last year citing national interests. According to a report from the financial post, ADM will hold its 20% stake in the company and try to increase it.
• The new International Wheat Yield Partnership, which brings together research groups, grain companies, and other donors, intends to see global wheat yields increase by 50% by 2034. The group was created at the Borlaugh summit on wheat and food security in Mexico on March 25.
