By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 29 – ICE Futures Canada canola contracts closed little changed on Tuesday, as the market consolidated after breaking above key levels during the trading session, analysts said.
The upswing in the value of the Canadian dollar, which gained more than half a cent against the US dollar, was responsible for some of the price softness.
Expectations of large 2013/14 carryout stocks of Canadian canola and a recent pickup in farmer selling to create bin space and generate cash flow ahead of spring seeding was bearish as well.
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On the other side, spillover support from the advances seen in Chicago soybean and soyoil futures was bullish.
Further support came from commercial and speculative buyers building a weather premium into the futures due to worries about delayed planting in Canada and the US.
About 23,409 canola contracts were traded on Tuesday, which compares with Monday when 25,026 contracts changed hands. Spreading accounted for 15,852 of the trades.
Milling wheat, durum and barley futures were untraded following price revisions after the close on Tuesday.
SOYBEAN futures at the Chicago Board of Trade were up by five to 17 cents per bushel on Tuesday, with the biggest gains in the front months as tight old crop supplies and solid end-user demand remained supportive.
Chart-based buying contributed to the gains in soybeans, as the market retested the contract highs hit earlier in the month.
The cool and wet conditions currently slowing planting operations across the Midwest remained slightly bearish as far as soybeans were concerned, and the new crop months lagged to the upside. Soybeans are seeded later than corn and any delays now will likely see some acreage shift out of corn and into beans instead.
SOYOIL futures were higher on Tuesday, taking some direction from the advances in soybeans.
SOYMEAL futures were stronger on Tuesday.
CORN futures in Chicago were up three to eight cents per bushel on Tuesday, with the slow planting pace across the Midwest behind some of the strength.
The US corn crop was 19% seeded as of this past Sunday, which was well behind the 28% average, according to the latest report from the USDA. With more rain in the forecasts across much of the Midwest, the possibility of further delays was supportive, according to traders.
However, the pace was still ahead of what was seen a year ago, and the fact that farmers will be able to make short work of seeding the crop when the conditions allow did limit the gains.
WHEAT futures in Chicago settled five to eight cents per bushel higher on Tuesday, as poor crop conditions for winter wheat in the southern US Plains remained supportive. Kansas City hard red winter wheat contracts were up by as much as 16 cents, while the Minneapolis market ranged from down three cents in the nearby May contract to up nine cents in September.
Weekly crop ratings from the USDA showed a slight decline, as drought concerns persist across the US Great Plains. Initial reports from the Wheat Quality Council’s tour of Kansas were also showing yield prospects well behind the year ago level.
The wheat market also continues to follow news out of Ukraine closely, as the unrest there has the potential to disrupt grain movement from the region.
• Early results from 14 fields toured in Kansas place expected yields at about 38 bushels per acre in the north-central part of the state. That compares with 43.8 bushels per acre in the same area a year ago. Conditions were said to be getting worse as the tour moves west.
• Thirty-three percent of the US winter wheat crop was rated good-to-excellent by the USDA, which was down by one percentage point from the previous week. Spring wheat was 18% seeded across the country, which was up slightly from the year ago pace, but still below the 30% average for this time of year.
• Recent rainfall across western France and into Germany will help the yield potential for wheat crops there, according to reports.
