By Terryn Shiells and Dave Sims, Commodity News Service Canada
Winnipeg, July 6 – Canola contracts on the ICE Futures Canada trading platform ended mixed on Monday, after the market staged a rally during the last few minutes of trade.
Some of the weakness was linked to traders shedding riskier assets in reaction to Greece’s decision to reject financial aid for their debt crisis.
Further downward pressure came from the large global oilseed supply situation and improving weather conditions in the US Midwest.
Spillover selling from the weaker Chicago soybean complex was also bearish.
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On the other side, traders are still worried about unfavourable weather lowering production for Canadian canola, which was supportive.
The Canadian dollar was down sharply, which was also bullish as it made canola more attractive to foreign buyers.
Monday’s lows were also seen as a good buying opportunity, according to analysts.
About 15,049 contracts traded on Monday, which compares with Friday when 4,026 contracts changed hands. Spreading accounted for 5,646 of the trades.
Milling wheat, barley and durum futures were untraded, though the Exchange made some adjustments following Monday’s close.
Soybean futures on the Chicago Board of Trade fell four to 16 cents per bushel on Monday, as the US Midwest received less rainfall over the weekend than originally expected. The forecast is also generally calling for drier weather throughout July which should aid growing conditions.
A stronger US dollar index also put downward pressure on prices, according to a report.
However, the downward turn could be short-lived as the size and health of the US crop is largely unknown, according to an analyst.
Soyoil futures in Chicago ended 74 to 80 points lower on the day following sharp declines seen crude oil.
Soymeal futures also finished lower, following soybeans.
Corn futures on the Chicago Board of Trade ticked one to two cents per bushel lower Monday due to increased selling by US farmers, according to a report.
Getting a handle on the overall state of the US crop is tricky, said a trader, as the eastern Corn Belt has suffered from excessive rains while the western half has been much drier.
The supply outlook for corn is tighter than expected which helped limit the losses, an analyst said.
Wheat futures on the Chicago Board of Trade closed three to five cents per bushel higher Monday, as multiple reports surfaced over the weekend about continued dryness in many parts of Europe and Western Canada.
However, Greece’s rejection of more austerity measures in a recent referendum is expected to put pressure on many equity and commodity markets moving forward. A slowdown in the Chinese economy is adding to the tension, according to a report.
The nearby September contract encountered resistance at the US$6.00 per bushel level, ultimately settling well below it.
– Dryness has prompted the Buenos Aires grains exchange, for a second time in three weeks, to cut Argentina’s wheat plantings forecast. The new forecast calls for 150,000 hectares less wheat in 2015/16 from the original plantings target of 3.75 million hectares.
– Temperatures as high as 40 degrees Celsius are adding further stress to an already troubled wheat crop in France and other parts of Europe, according to a report.
– Algeria is reportedly looking to buy at least 50,000 tonnes of soft milling wheat.
Settlement prices are in Canadian dollars per metric ton.
