By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG – ICE Futures Canada canola contracts ended weaker on Wednesday, undermined by spillover pressure from the weakness in outside oilseeds, including Chicago soybeans and soyoil, analysts said.
The USDA’s monthly supply and demand report came with both bearish and bullish news for US soybeans, as they reduced 2013/14 US ending stocks by 5 million bushels to 125 million bushels. But, 2014/15 US soybean production was slightly larger than expected at 3.64 billion bushels.
Some of the weakness in canola futures was also linked to the stronger Canadian dollar, which broke above 92 cents US on Wednesday.
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Generally favourable growing conditions for North American oilseed crops were also weighing on canola prices.
However, there are still some worries about unseeded acres due to wet conditions in parts of Saskatchewan and Manitoba, which limited the losses.
Routine end-user demand and slow farmer selling were also supportive for canola.
About 21,656 canola contracts were traded on Wednesday, which compares with Tuesday when 16,983 contracts changed hands. Spreading accounted for 12,416 of the contracts traded.
Milling wheat and barley futures were untraded following revisions after the close Wednesday. Durum futures traded for the first time in more than a year, with five October contracts changing hands at weaker prices.
SOYBEAN futures at the Chicago Board of Trade closed five to 17 cents per bushel lower Wednesday, on the government’s forecast for higher-than-expected global oilseed supplies. Production for 2014-15 is expected to top out at 516 million tonnes, up 0.8 million from last month.
Inventories of US soybeans are expected to total 325 million bushels at the end of 2014-15. This has dropped from last month when the forecast was 330 million bushels.
Industry watchers say the more important information will be revealed later this month when the acreage and quarterly stocks numbers are released.
SOYOIL futures were lower on Wednesday.
SOYMEAL futures were lower, following soyoil and soymeal.
CORN futures in Chicago fell two to four cents per bushel Wednesday, after the USDA repeated earlier predictions that the US would see a record crop in the fall, along with higher-than-expected global stockpiles.
In its monthly report, the USDA said good weather should help growers churn out 13.935 billion bushels of corn this year. That is slightly higher than last year’s record crop of 13.925 billion bushels.
Global stockpiles are expected to reach 182.7 million metric tons, which is above earlier forecasts of 182.1 million MMT.
Weather forecasters are not calling for any major changes in the coming days, which could limit any upside.
WHEAT futures in Chicago hit a three-month low on Wednesday, sinking below the psychologically important US$6.00 a bushel barrier. This occurred after the government raised projections for US inventories at the end of the 2014-15 season.
In Wednesday’s monthly report, the government says there should be 574 million bushels at the end of the 2014-15 season next May. That compares to earlier estimates of 540 million bushels.
The USDA also reduced its estimate for exports from the US and says growers can expect to see less use of wheat in animal feed.
There is concern the US Southern Plains haven’t seen enough moisture in recent days.
• Indian purchases of wheat from local farmers are set to climb at least eight percent this year. The government is attempting to bolster internal stocks against forecasts of below-average monsoon rains and the spectre of a possible El Nino weather pattern, according to a report.
• Argentina has given the go-ahead to export 500,000 metric tonnes of wheat from the developing crop, after suspending exports of grain last year after a food shortage, analysts said.
• South African wheat futures fell to the lowest level in four weeks in Johannesburg on the highest buying and selling of the contracts so far this month, according to a report.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
