By Terryn Shiells and Marney Blunt, Commodity News Service Canada
WINNIPEG, Aug. 21 – ICE Futures Canada canola contracts ended lower on Thursday, making new lows during the session and settling below support in the November contract.
The losses came despite a friendly Statistics Canada production report, as traders shrugged it off and shifted focus to ongoing expectations of record large US bean production, analysts said.
StatsCan pegged 2014/15 Canadian canola production at 13.91 million tonnes, which was at the low end of expectations and below the 17.96 million tonnes grown last year.
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Canola futures on the Intercontinental Exchange suffered double-digit losses on Thursday after the release of new data from Statistics Canada….
Some of the price weakness was linked to chart-based selling after the market tested new lows, with the stronger Canadian dollar also weighing on values.
Forecasts calling for rain across the Prairies this weekend, which could benefit some later seeded crops, added to the bearish tone.
However, worries about cold temperatures possibly damaging Canadian crops next week limited the declines.
About 14,354 contracts traded on Thursday, which compares with Wednesday when 17,500 contracts changed hands. Spreading accounted for 7,642 of the trades.
Milling wheat, durum and barley futures were untraded, though the Exchange moved wheat prices higher after Thursday’s close.
SOYBEAN futures in Chicago were mixed on Thursday, with the only gains in September and November contracts.
Traders say that old crop tightness should keep the September contract active, however the new crop months are not concerned about supply issues with the large crop on its way.
All other soybean contracts remain on a downward trend with firm basis at the processors keeping nearby futures supported.
Weather outlook are improving with some additional moisture for soybeans this week in the six to ten day and 11 to 15 day outlooks. This precipitation will be beneficial for soybean crops that are lagging behind in maturity.
There are reports that the ProFarmer crop tour has been finding plenty of soybean pods so far, however most are lagging behind in maturity. The tour is on its fourth and final day.
SOYOIL futures in Chicago closed lower on Thursday.
SOYMEAL futures closed higher on Thursday, keeping the spread with soybean oil.
CORN futures in Chicago closed higher on Thursday, despite bearish rains in primary corn growing areas, traders say.
There is talk of excellent weather to finish the season as well as talk of bearish rains for dry areas of southern Minnesota and northern Iowa in the short-term. Those two areas and Illinois saw great rainfall within the last 24 hours, and it is looking like every corn production state in the eastern Corn Belt will see rainfall by next Monday. Temperatures will also be remaining warm.
In another two weeks moisture will be viewed as a bullish factor for corn, but for now it is benefiting yield potentials.
Commercial buying has been helping to support the market, with the intermonth spreads firming in addition to the basis improving. Weekly export sales were 99,900 metric tonnes of old crop and 719,000 metric tonnes of new crop.
WHEAT futures in Chicago were higher on Thursday amid disappointing weekly export sales, brokers say.
Weekly export sales came in at only 209,000 metric tonnes.
In another report, Statistics Canada had pegged all wheat production at 27.7 million metric tonnes, significantly down from 2013.
Spread trade continues to firm between contract months and classes of wheat which remains an encouraging demand sign, traders say.
The spring wheat harvest is expected to continue along at a slow pace, and traders will be watching for further development between Russia and Ukraine.
• Germany’s wheat crop is expected to be over 26 million, according to the company ADM Germany. This compares with last year’s harvest of 24.6 million metric tonnes of wheat.
• There are reports that UK wheat is looking reasonably positive despite the rain, but feed wheat is proving increasingly difficult to shift even as prices continue to slide.
• Last week widespread frost in Paraguay impacted nearly 12 per cent of the 1.7 million acres of wheat.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
