By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, July 8 – ICE Futures Canada canola contracts ended firmer on Tuesday, despite seeing spillover pressure from the sharp losses in Chicago soybean and soyoil futures.
Steady commercial demand, as there is a possibility that canola supplies will be tight due to flood damage in parts of Western Canada this season, underpinned prices.
The need to keep a weather premium built into prices, as the full extent of flood damage won’t be known until affected areas see a good amount of hot weather, was also bullish.
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Slow farmer selling, as they wait until they are more confident in their new crop, further underpinned values.
However, talk that demand may start to fade, as canola has lost its relative “cheapness” compared to competing oilseeds, limited the advances.
About 16,000 contracts traded on Tuesday, which compares with Monday when 19,210 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchanged adjusted wheat and durum values after Tuesday’s close.
SOYBEAN futures at the Chicago Board of Trade fell nine to 24 cents per bushel lower Tuesday, hitting their weakest prices in almost five months. Values were undermined by weather forecasts in the US Midwest that are steadily improving the prospects for this year’s crop.
Seventy-two per cent of the crop was said to be in good or excellent condition as of July 6. More favourable weather is expected to hover over most growing regions for the next week to ten days.
Speculators continued to build short positions in soybeans and soy oil, and possibly soy meal as well, according to a report.
There are signals the market is trying to form a minor bottom but the burden is still on the bull to fill it, which they have been unwilling to do thus far, according to an analyst.
SOYOIL futures were lower, following soybeans.
SOYMEAL futures moved lower with soybeans as well on Tuesday.
CORN futures in Chicago were one to two cents per bushel softer on Tuesday, undermined by follow-through selling on recent losses and favourable growing conditions in the U.S. Midwest.
Warm, wet weather is expected to dwell in most areas through pollination and could cap prices, said an analyst.
Some corn growing areas are starting to see an influx of green foliage and could do with hot, dry weather.
Wheat futures in Chicago were little changed on Tuesday, seeing a consolidation after falling to fresh four-year lows on Monday.
The US winter wheat harvest is moving along and yields have been better than expected, which weighed on values.
But, India is expected to hold onto its wheat supply this year, due to concerns over this year’s monsoon rains. The decision could help lift prices which have been weighed down by large global supplies, according to a trader.
• Heavy rains in France have interrupted the country’s wheat harvest, raising concerns about crop quality, according to a Paris-based advisor.
• The conditions for Kazakhstan’s wheat harvest this year have been described as favourable.
• Egypt imported 5.1 million tonnes of wheat through its public sector in 2013/14 from Romania, Russia, France, the US and Ukraine, according to a report.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
