By Terryn Shiells, Commodity News Service Canada
Winnipeg, April 11 – ICE Futures Canada canola contracts closed sharply weaker on Friday, following the losses seen in Chicago soybean and soyoil futures, analysts said.
Ideas that demand for oilseeds from China is slowing, after they cancelled orders of soybeans from the US and Brazil on Thursday, weighed on the futures.
Long liquidation by speculators, commercial selling and continued profit taking on recent advances added to the bearish tone.
Expectations that Canadian producers will plant more acres to canola this spring and the large canola supply situation continued to overhang the market.
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However, the downswing in the value of the Canadian dollar, slow farmer selling and continued ideas that canola is undervalued compared to other oilseeds limited the losses.
About 20,251 canola contracts were traded on Friday, which compares with Thursday when 28,471 contracts changed hands. Spreading accounted for 15,336 of the trades made.
Milling wheat, durum and barley futures were untraded, though the Exchange made small adjustments to wheat after the close on Friday.
SOYBEAN futures at the Chicago Board of Trade closed seven to 20 cents US per bushel lower on Friday. Much of the price softness was linked to concerns about slowing Chinese demand after they cancelled a large order of soybeans from the US and Brazil on Thursday.
Technical based selling, as the market was said to be overbought, also put downward pressure on the futures, analysts said.
Expectations that US farmers will plant a record large amount of acres to soybeans this spring added to the bearish tone.
However, continued worries about the tight old crop supply situation in the US helped to limit the declines.
SOYOIL futures were 37 to 44 points weaker amid concerns about slowing Chinese demand and spillover pressure from the declines seen in soybeans, traders said.
However, spillover support from the gains seen in Malaysian palm oil futures overnight tempered the declines.
SOYMEAL futures were also lower on Friday due to worries that Chinese demand is declining, market watchers said.
CORN futures in Chicago settled one to six cents a bushel lower on Friday, undermined by spillover pressure from the losses seen in Chicago soybean futures, brokers said.
Reports that beneficial weather conditions have allowed some farmers in the US to start fieldwork and prepare for corn seeding were bearish as well.
However, some support came from forecasts calling for rain in the eastern Midwest, which could delay field work in that region over the weekend. Worries about tight old crop supplies in the US were also bullish.
WHEAT futures in the US were mixed with Kansas City and Chicago futures moving one to two cents US lower and Minneapolis futures closing one cent lower to two cents per bushel higher.
Spillover pressure from the losses seen in soybeans was bearish for all three markets, as was the large global supply situation, analysts said.
Kansas City and Chicago futures were also undermined by forecasts calling for beneficial rainfall in some parts of the US Plains over the weekend.
On the other side, ongoing uncertainty about how much damage dry weather will do to US winter wheat crops this year was supportive.
Minneapolis spring wheat futures were also underpinned by concerns about prolonged winter weather possibly delaying planting this spring, traders said.
• According to reports, Algeria purchased 450,000 tonnes of optional origin milling wheat at a price of $315.00 to $316.50 per tonne.
• About 184,300 tonnes of Canadian wheat were exported during the week ended April 6, Canadian Grain Commission data shows.
• The UK-based International Grains Council projected global wheat production would total 700 million tonnes in 2014/15, down from their estimate of 709 million tonnes for 2013/14.
ICE Futures Canada canola settlement prices are in Canadian dollars per metric ton.
