By Terryn Shiells and Marney Blunt, Commodity News Service Canada
WINNIPEG – ICE Futures Canada canola contracts ended mostly higher on Tuesday, after trading lower for most of the morning. The July contract saw the only losses, as traders rolled out of their positions ahead of its expiry.
Early losses in Chicago soyoil were erased, and the futures moved higher Tuesday afternoon, providing some spillover support for canola.
Worries about unseeded and lost acres due to excessive moisture in parts of Western Canada so far this growing season were also supportive.
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A lack of farmer selling, as they want to be more confident in the new crop before selling off old crop supplies, added to the bullish tone.
However, weakness in Chicago soybean and soymeal futures spilled over to weigh on prices, limiting the upside.
Recent strength in the Canadian dollar and reports that the US soybean crop is in very good condition were also bearish.
About 16,393 canola contracts were traded, which compares with Monday when 12,609 contracts changed hands. Spreading accounted for 9,778 of the trades.
Milling wheat, durum and barley futures were untraded though the Exchange lowered milling wheat prices after Tuesday’s close.
SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday after U.S. government reports on Monday indicated demand for oilseeds declined while the crop rating stayed high, analysts say.
Soybean futures were down 9.00 to 12.25 cents U.S. per bushel on June 24.
The U.S. Department of Agriculture (USDA) inspected 61,847 metric tonnes of soybeans for overseas delivery on the week that ended June 19. Less than a third of that had been inspected the previous week, according to a report from the government released on Monday.
As of Sunday, approximately 72 per cent of the domestic soybean crop was in good or excellent condition. This percentage was down slightly from a week earlier, but is still a very good number for this time of year. Abundant precipitation has kept crop rating high, although in some areas it has caused flooding in fields, traders say.
SOYOIL futures closed higher on Tuesday.
SOYMEAL futures closed lower on Tuesday, keeping the spread between soybean oil.
CORN futures in Chicago were lower on Tuesday due to the excellent crop condition, traders say. As of Sunday, nearly three-quarters of the crop was in good or excellent condition.
July corn futures decreased between 1.50 to 1.75 cents U.S. per bushel.
WHEAT futures in Chicago fell on Tuesday to their lowest price in four months as producers are speeding up the harvesting process of the U.S. winter crop, traders say.
Wheat futures on June 24 decreased between 8.75 to 9.75 cents U.S. per bushel.
As of Sunday, 33 per cent of the U.S. winter wheat crop had been collected, up from 16 per cent the previous week according to a report released on Monday from the USDA. Kansas, which produces the most wheat in the States, had 24 per cent of the crop collected. This is a significant increase from the prior week, where only two per cent of the crop in Kansas had been completed.
Brokers say that the price of wheat may also be on the decline due to signs of weaker demand for U.S. wheat. As an example, Egypt, the biggest importer of wheat, bought 60,000 metric tonnes of Russian wheat and 120,000 tonnes of Romanian wheat on June 21, shunning U.S. inventories that are deemed to be too expensive.
• Trade sources have reported the Chicago Mercantile Exchange (CME) has been working on its own wheat contract to challenge Euronext Paris-based futures, with the aim of launching later this year.
• Euronext, formerly known as Matif, has been under criticism for offering a sole delivery point for wheat, although now plans to add another two port delivery points before the end of 2015.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
