By Terryn Shiells, Commodity News Service Canada
WINNIPEG, July 28 – ICE Futures Canada canola contracts ended stronger on Monday, following the sharp gains seen in the Chicago soy complex.
But, canola futures lagged soybeans and soyoil to the upside as traders were being cautious, waiting for fresh news on the state of the western Canadian canola crop, analysts said. CWB is conducting a tour of Prairie crops this week, with conclusive results expected on Thursday.
Canola futures also found some spillover support from the advances seen in Malaysian palm oil and European rapeseed futures.
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Steady demand, slow farmer selling and the need to keep a weather premium built into prices were also bullish.
However, forecasts calling for improving weather that will benefit western Canadian crops this week limited the advances.
Continued expectations of a large 2014/15 US soybean crop were also bearish.
About 13,747 contracts traded on Monday, which compares with Friday, when 10,123 contracts changed hands. Spreading accounted for 9,714 of the trades made.
Milling wheat, durum and barley futures were untraded, though wheat prices were moved lower by the Exchange after Monday’s close.
SOYBEAN futures at the Chicago Board of Trade closed 18 to 25 cents US per bushel lower on Monday. Prices were lifted by worries about hot, dry weather in the forecast for many US growing regions next month possibly lowering yields for soybean crops.
Continued strong demand for the US commodity, worries about tight old crop supplies and chart-based buying were also bullish, analysts said.
However, the 2014/15 US soybean crop is still expected to be very large, which kept a lid on the advances.
SOYOIL futures were up sharply as well, following soybeans. Strength in Malaysian palm oil futures overnight was also bullish, brokers said.
SOYMEAL futures closed sharply higher, also following the advances seen in soybeans, market watchers said.
CORN futures in Chicago settled three to six cents a bushel higher. Some of the advances were linked to spillover support from the gains seen in soybeans.
Steady demand from the export and ethanol sectors was also underpinning prices, traders said.
Concerns about unfavourable weather in some pockets of the US Midwest this week were also supportive, though the US corn crop is still expected to be record large.
News that the southern US corn harvest is quickly approaching helped to limit the advances.
WHEAT futures were weaker, with Chicago, Minneapolis and Kansas City futures seeing losses of one to seven cents US per bushel.
Profit taking by commercials on Friday’s advances helped to push prices lower, as did pressure from the advancing US winter wheat harvest.
As harvest activities move towards the northern United States, yield reports continue to get better and better, participants said.
The large global supply situation continued to overhang the market. Though, oversold price sentiment and spillover support from the gains in Chicago corn and soybeans limited the declines.
• Reports show that Romanian wheat exports were doubled year-over-year in the first quarter of 2014. The country exported 926,000 tons of wheat in the first quarter.
• Russian wheat production was pegged at 57.5 million metric tonnes in 2014, a Russian ag consultant estimated.
• Australian officials believe the country’s wheat crop will produce less than originally anticipated due to unfavourable dry conditions in some areas.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
