By Dave Sims and Erin DeBooy, Commodity News Service Canada
Winnipeg, August 23 – THE ICE Futures Canada canola market posted modest gains in the wake of Tuesday’s crop estimates compiled by Statistics Canada.
The agency pegged this year’s canola crop production at just over 17 million tonnes, which was below what most analysts had been expecting. Last year, Canada produced 17.2 million tonnes.
“In a nutshell, I would say if the numbers here turn out to be what they are, which isn’t likely, it has bullish connotations for canola,” said an analyst in Winnipeg.
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Gains in Malaysian palm oil and crude oil helped underpin the market.
The November contract seems to have found support at the C$470 per tonne mark.
However, declines in Chicago Board of Trade soybeans were bearish for values.
The Canadian dollar was stronger relative to its US counterpart, which also made canola less attractive on the international market.
The deadline for China to lower the amount of dockage it accepts on imports of Canadian canola is fast approaching (September 1), which is at the back of investors’ minds.
Around 18,633 canola contracts were traded on Tuesday, which compares with Monday when around 16,529 contracts changed hands.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade fell one to two US cents on Tuesday with favourable weather forecasts and reports of record yields.
Soybeans boast the second highest ratings in the past 30 years, according to USDA federal data, weighing on prices.
The ratings added to optimism about soybeans turning out record crops this year.
Scattered showers forecast throughout the Farm Belt will benefit crops further as autumn harvest approaches, also weighing on the market.
SOYOIL prices traded both sides of unchanged on Tuesday, with the September contract closing at 33.89 US cents per pound for the second day in a row, while the October contract rose 2 cents to settle at 34.04 US cents per pound.
SOYMEAL weakened on Tuesday.
CORN futures fell four to five US cents on Tuesday as field reports from the Midwest crop tour failed to provoke market buying.
Conditions of corn crops improved last week, according to USDA federal data, and favourable weather is expected to continue in the next few weeks, weighing on prices.
Crop scouts across Ohio and South Dakota reported some of the worst corn yields so far on the Midwest crop tour, limiting losses. However, the figures were expected and reports will likely improve as scouts continue to move into the heart of the Corn Belt.
WHEAT closed lower on Tuesday, dropping around seven US cents per bushel.
Spring wheat is 65 per cent harvested, according to the USDA weekly wheat progress report, which compares to 48 per cent a week ago, weighing on prices.
Progress is well above the 10-year average at this time of year, which is 51 per cent.
The Farm Belt continues to receive favourable weather which is expected to continue through the last weeks of growing season.
-Total wheat production in Canada is expected to reach 30.5 million tonnes in 2016, up from 27.6 million tonnes in 2015, according to the Statistics Canada crop production report. This could mark the second time in 25 years wheat production will exceed 30 million tonnes.
– The 2016 US winter wheat yield is expected to set a new record-high of 53.9 bushels per acre, according to the USDA’s July 14 wheat outlook. If realized, it would be up 11.4 bushels per acre from last year.
