By Terryn Shiells and Marney Blunt, Commodity News Service Canada
WINNIPEG, Aug. 28 – ICE Futures Canada canola contracts ended stronger on Thursday, as speculators were buying amid uncertainty surrounding how large 2014/15 Canadian canola supplies will be, analysts said.
That uncertainty stems from extremely variable growing conditions seen throughout the summer, as well as a lack of news about how recent cool, wet conditions in some areas have impacted canola crops.
Steady commercial demand, slow farmer selling and sentiment that the market is due for a corrective bounce added to the bullish tone.
Read Also
Canadian Financial Close: Loonie, crude oil rise higher
Glacier FarmMedia – The Canadian dollar maintained its positive momentum on Monday, aided by gains in crude oil and despite a…
Some spillover support also came from the gains seen in Chicago soybean futures.
However, ongoing expectations of record large 2014/15 US soybean production helped to cap the advances.
Some downward pressure also came from the stronger Canadian dollar, as it makes canola more expensive for crushers and exporters.
About 15,689 contracts traded on Thursday, which compares with Wednesday when 15,265 contracts changed hands.
Durum futures were untraded and unchanged. Milling wheat was also untraded, though the Exchange adjusted prices after Thursday’s close.
Barley futures saw some activity, with 25 October contracts traded at a lower price.
SOYBEAN futures in Chicago were higher on Thursday amid signs of strong demand from overseas buyers, analysts say.
On the week that ended August 21, oilseed exports had topped trader’s expectations, with the U.S. Department of Agriculture reporting on Thursday net sales of 1.29 million metric tonnes for delivery in the 2014/15 season that begins on September 1.
China accounted for approximately half of the new sales, with Vietnam, Mexico and Turkey making purchases. China is the world’s largest soybean importer.
Weather forecasts remain good for the rest of the week with more beneficial rainfall on its way. There are reports of sudden death syndrome, but extent of potential damage is unknown at this time.
SOYOIL futures in Chicago closed lower on Thursday.
SOYMEAL futures closed higher on Thursday, keeping the spread with soybean oil.
CORN futures in Chicago rose on Thursday, buoyed by climbing wheat prices, traders say.
Analysts are expecting that the uptick in corn prices won’t last, as forecasts for continued favourable weather conditions will benefit the already-prime condition of the U.S. corn crop before harvest.
Precipitation and near to above-normal temperatures are forecast for next week, which will supply plenty of moisture for late corn growth in the U.S. Midwest, traders say.
Approximately 73 per cent of the U.S. corn crop is rated as in good to excellent condition as of Sunday, according to the U.S. Department of Agriculture.
WHEAT futures in Chicago were hit a three-week high on Thursday as geopolitical tensions escalated between Russia and Ukraine, causing speculation that the instability in that region could disrupt the grain trade by prompting buyers to seek U.S. supplies, brokers say.
Wheat prices had gained for the second session in a row upon overnight reports that Ukraine has accused Russia of invading their country, seizing a coastal town and villages near the border. Both Russia and Ukraine are large exporters of wheat, so there are concerns that this issue will slow exports.
There are still quality concerns for the higher protein classes of wheat continue to linger as rainfall is certain areas of the U.S. is diminishing crop quality and reducing the availability of quality milling wheat.
– There are reports indicating that South African farmers may produce 4.8 per cent less wheat this season than a year earlier, making it the smallest harvest since 2010.
– The second consignment of two million quintals of wheat the government bought from Ukraine will arrive at the Port of Djibouti in early-September. The first consignment of the same amount of wheat has already started to arrive at the central warehouse of the Ethiopian Grain Trade Enterprise as of July 29.
– In Buenos Aires, Argentina, approximately 200,000 tonnes of wheat or nearly 10 per cent of the crop was lost due to torrential rainfall last weekend.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
