By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 7 – ICE Futures Canada canola contracts were weaker on Friday, undermined by profit taking following recent gains and ahead of the weekend, analysts said.
The upswing in the value of the Canadian dollar, which gained more than a third of a cent against the US dollar on Friday, also fuelled some of the declines.
Large Canadian canola stocks and problems moving the supplies out of Western Canada continued to overhang the market.
Read Also
Canadian Financial Close: Loonie returns above 72 U.S. cents
By Glen Hallick Glacier Farm Media | MarketsFarm – The Canadian dollar on Friday finally turned around to close higher,…
Expectations of a large South American soybean crop and weakness in Chicago soyoil futures were also bearish for canola.
However, ideas that canola is undervalued compared to other oilseeds limited the declines.
Spillover support also came from the positive tone seen in Chicago soybean futures.
About 22,679 canola contracts were traded on Friday, which compares with Thursday when 28,679 contracts changed hands. Spreading accounted for 20,812 of the trades.
Milling wheat, durum and barley futures were untraded following revisions to wheat after the close on Thursday.
Soybean futures at the Chicago Board of Trade were up two to six cents per bushel on Friday, with positioning ahead of Monday’s USDA supply/demand report a feature.
Chinese markets reopened today after the week-long Lunar New Year holiday, and the fact that the country has still not cancelled any previous US purchases provided some underlying support.
Forecasts calling for hot weather in some soybean growing regions of Brazil were also somewhat supportive, although South American crops are still expected to be large overall.
Soyoil futures were 15 to 26 points lower on Friday, after bouncing around both sides of unchanged.
Soymeal futures were 40 cents to US$3.00 higher on Friday, following soybeans. Spreading against soyoil also favoured the meal side of the equation on Friday.
Corn futures in Chicago settled with small gains of one to two cents on Friday, after trading around both sides of unchanged in choppy activity.
Solid export demand accounted for some of the buying interest in the corn market, as the USDA reported fresh export sales to ‘unknown destinations’ Friday morning.
Expectations for tightening US corn stocks in Monday’s report were also supportive, although the looming South American crops did temper the upside potential.
Wheat futures in Chicago were down by two to three cents per bushel on Friday, with speculative profit-taking to end the week behind some of the selling pressure. The Kansas City hard red winter and Minneapolis spring wheat contracts were narrowly mixed, generally settling within a cent of unchanged.
Improving US winter wheat crop prospects, as recent snowfall should help alleviate concerns over possible winterkill in some areas, put some pressure on US prices.
However, export demand for US wheat has picked up recently and expectations for tightening US stocks projections in Monday’s report were slightly supportive.
• Average trade estimates are forecasting US wheat ending stocks, for the crop year ending May 31, at 602 million bushels. That compares with stocks at the same point the previous year of 718 million bushels.
• Iran reportedly bought 400,000 tonnes of wheat from Russia and the EU in a tender on Friday.
• France’s agriculture ministry pegged soft wheat planted area in the country at 4.99 million hectares, which was up slightly from both the previous estimate and the year ago level of 4.96 million. Durum area in the country was reported at 290,000 hectares, which would be the lowest since 1997.
Canadian canola settlement prices are in Canadian dollars per metric ton.
