By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, July 9 – ICE Futures Canada canola contracts ended sharply lower on Wednesday, following the large losses seen in the Chicago soy complex during the past week, analysts said.
Much of the recent weakness in Chicago soybean and soyoil futures was linked to favourable weather conditions for the development of the 2014/15 US crop.
Canola futures were also undermined by the upswing in the value of the Canadian dollar. Slowing demand, as canola is no longer undervalued compared to other oilseeds, was also bearish.
Read Also
Canadian Financial Close: Loonie stands pat
By Glen Hallick Glacier Farm Media | MarketsFarm – The Canadian dollar was unchanged on Friday as weakness in the…
There are still some concerns about flood damage in Western Canada, but crops in unaffected areas were reported as looking good.
The losses in canola were limited by slow farmer selling, as they wait until they’re more confident in the new crop before emptying their bins.
About 18,733 contracts traded on Wednesday, which compares with Tuesday when 16,000 contracts changed hands.
Milling wheat, durum and barley futures were untraded. The Exchange moved wheat prices higher after Wednesday’s close.
CORN futures in Chicago were five to seven cents per bushel lower on Wednesday as favourable weather patterns improve what is already expected to be a bumper crop.
Analysts say some support is coming from the livestock and ethanol sector, who are buying supplies to meet immediate needs. The action has kept the July contract above the US$4.00 per bushel level during thin trade.
There are early reports the USDA will leave its estimated production levels for the US corn crop at the previously-forecasted 13.935 billion bushels in its next monthly report, due Friday.
Asian buyers are reportedly scaling back purchases, in the hopes prices drop even further.
SOYBEAN futures at the Chicago Board of Trade were two to 14 cents lower Wednesday, as favourable weather forecasts persist in most soybean growing areas. Values have seen heavy losses since June 30 and a bear-trend phase remains intact.
The US Northern Plains are expected to see a drier bias in the near-future which is expected to help farmers carry out field-work.
The market is open to consolidation moving forward, said an analyst, in the wake of new lower price levels.
SOYOIL futures were lower, following soybeans.
SOYMEAL futures were mixed, with the near-term values spreading against soy oil.
WHEAT futures in Chicago were five to six cents per bushel lower as investors continue to liquidate long positions and wait for rallies.
Good growing conditions and the advancing fall harvest are continuing to undermine any support levels right now, an analyst said.
The Russian wheat harvest is behind but yields are said to be better, according to a report.
• Farmers in Argentina will not be able to export the one million tonnes of wheat they were expecting to this year, after the government Argentinean government imposed a limit of 1.5 million tonnes of cereal, according to a report.
• France’s wheat crop this year is nearly all winter wheat, according to a report. The country is forecasting a drop in overall production.
• Severe drought in Spain is raising speculation the country may import more grains this year.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
