By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, May 15 – ICE Futures Canada canola contracts were weaker on Thursday, retreating from the sharp gains seen earlier in the week. The rally was said to be overdone, and due for a downward correction, said analysts.
Some spillover pressure also came from the declines seen in Chicago soybean and soyoil futures.
The large Canadian canola supply situation, a recent pickup in farmer selling and reports of improving planting weather in Western Canada added to the bearish tone.
Read Also
ICE canola holding onto gains at midday Monday
By Phil Franz-Warkentin Glacier FarmMedia — The ICE Futures canola market was posting small gains at midday Monday, as the…
However, continued ideas that canola is undervalued compared to other oilseeds helped to limit the declines.
The need to keep a weather premium built into the market was also supportive.
About 18,555 canola contracts were traded on Thursday, which compares with Wednesday when 23,918 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange adjusted prices following Thursday’s close.
SOYBEAN futures at the Chicago Board of Trade ended seven to 16 cents per bushel lower Thursday on speculation that US producers who have finished planting corn will make rapid progress planting oilseeds.
Approximately 20 per cent of the US soybean crop has been put into the ground as of this past Sunday, according to the USDA.
China has announced it is expanding the exemption of its VAT tax to include soybeans purchased from its reserve, according to a report.
SOYOIL futures were lower on Thursday.
SOYMEAL futures were lower following recent volatility.
CORN futures in Chicago dropped six to 11 cents per bushel lower Thursday as forecasts of warm, dry weather in the Midwest continue to cast downward pressure.
The price also fell on indicators that suggest demand is sagging for US supplies, an analyst said.
Reports from the Ukraine indicate planting is still underway but has fallen behind the average timelines, according to a report.
WHEAT futures in Chicago were 12 to 13 cents per bushel lower Thursday and 22 to 27 cents lower on the Kansas City Board of Trade as rain continued to fall on parts of the US Southern Plains and Midwest, which improved the outlook for winter wheat.
According to the USDA, just 30% of the country’s winter wheat stocks were listed in good or excellent conditions, underscoring how badly needed the moisture is.
Overseas buyers cancelled 154,300 tonnes of US wheat. The cost of US wheat is too expensive compared to other supplies on the global market, an analyst said.
• US wheat millers say the Philippines government has agreed to a provisional anti-dumping duty on Turkish flour imports.
• China is expected to produce 122.6 million tonnes of grain in 2014, up 0.7% from last year according to the Chinese National Grain and Oils Information Centre.
• The ongoing conflict between Russia and Ukraine is expected to eventually result in supply line disruptions, according to a US-based analyst.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
