By Terryn Shiells and Marney Blunt, Commodity News Service Canada
WINNIPEG – ICE Futures Canada canola contracts ended stronger on Monday, seeing some spillover support from the gains seen in Chicago soyoil and soybeans.
Worries about wet weather causing some acreage losses for western Canadian canola farmers were also behind the strength, analysts said.
Steady commercial demand for old crop canola, paired with a lack of significant farmer selling, further underpinned the market.
However, the Canadian dollar jumped higher on Monday, limiting the advances as it made canola less attractive to crushers and exporters.
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Weakness in US grain markets also spilled over to weigh on canola.
Activity was on the quite side on Monday. About 12,609 canola contracts were traded, which compares with Friday when 21,178 contracts changed hands. Spreading accounted for 7,476 of the trades.
Milling wheat, durum and barley futures were untraded, though revisions were made to wheat prices following Monday’s close.
SOYBEAN futures at the Chicago Board of Trade gained slightly on Monday based on speculations that positive economic news from China could potentially boost oilseed demand.
July soybean futures gained 9.00 cents US per bushel on Wednesday while November contracts increased by 2.5 cents US per bushel.
Analysts say that heavy rain and warm weather in the forecast could help improve crop conditions for the next week. Long-term direction for will rely on the July/August weather patterns and the June 30 report from the U.S. Department of Agriculture (USDA). Increased acreage in the USDA report could prove to be a bearish market factor, brokers say.
SOYOIL futures closed higher on Monday.
SOYMEAL futures closed lower on June 23, keeping the spread between soybean oil and soymeal.
CORN futures in Chicago were lower on Monday as investors bet that crop production will not be significantly affected by damage from heavy rain fall in the parts of the northern U.S. Midwest.
July corn futures decreased by 8.75 cents US on Monday, and December corn futures also decreased by 9.50 cents US per bushel.
In the past two weeks, parts of South Dakota through northern Iowa to southern Minnesota saw six times more rainfall than normal, according to the National Weather Service. There was some flooding and crop damage caused by hail, but analysts say that for the most part damage remained isolated.
The excess rain that is flooding low-lying fields in the Midwest is expected to benefit crops if weather turns hot and dry in July.
WHEAT futures in Chicago dropped on Monday due to drier weather conditions in the U.S. southern Great Plains that will enable farmers to speed harvest of winter wheat, traders say.
July wheat futures decreased 5.50 cents US per bushel and December contracts lost 5.75 cents US per bushel.
Traders also speculate that the rain forecast in the Black Sea region, including Russia and Ukraine growing areas, will improve crop prospects.
• Saudi Arabia purchased 780,000 tonnes of both hard and soft wheat for shipment periods between September 10 and November 30, according to the Grain Silos and Flour Mills Organization. In total, it bought 660,000 tonnes of hard wheat and 120,000 tonnes of soft wheat.
• Saudi Arabia aims to steadily reduce agriculture and plans to be completely reliant on imports by 2016 in order to save water.
• The country intends on exporting 2.7 million tonnes of foreign wheat this year.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
