By Dave Sims, Commodity News Service
Winnipeg, Oct. 10 – The ICE Futures Canada canola market settled lower on Friday – in sympathy with the US soy complex.
Canola moved largely in step with US soybeans which were pressured by the release of the USDA crop production and supply/demand report. The USDA raised its estimate for soybeans production in the US, but not as much as initially thought. This sent the November canola contract below the psychologically important 400 dollars per tonne mark.
European rapeseed futures and soy oil were both lower which contributed to the declines.
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However, the Canadian dollar was weaker against its American counterpart which limited the losses.
Wet weather across parts of North America slowed harvest efforts, which also provided some support.
Around 27,807 canola contracts were traded on Friday, which compares with Thursday when around 34,000 contracts changed hands. Spreading was a feature, accounting for 22,022 of the contracts traded.
US Grain and Oilseed Review
SOYBEAN futures at the Chicago Board of Trade were sharply lower on Friday, settling with losses of 19 to 21 cents US per bushel.
The declines came despite a USDA report that was initially friendly, as production estimates for the 2014/15 US crop came in below expectations.
The USDA pegged 2014/15 US soybean production at 3.93 billion bushels, with a yield of 174.2 bushels an acre, which was record large and an increase from the September report. But, it was below expectations calling for a yield of 47.6 bushels an acre and production of 3.98 billion bushels.
Some of the weakness in the market was linked to a pickup in farmer selling in the US and pressure from the advancing US harvest, analysts said.
Good planting progress for the South American soybean crop and expectations that soybean exports out of Brazil will be record large in 2014 added to the bearish tone.
SOYOIL futures finished sharply lower on Friday, taking some direction from the weakness in Chicago soybean and Malaysian palm oil futures, traders said.
SOYMEAL futures were weaker, following the softness in soybeans, brokers said.
CORN futures in Chicago settled sharply lower, seeing losses of seven to 11 cents US per bushel on Friday.
Some of the softness was linked to the USDA’s increased production estimates for the 2014/15 US corn crop, though the trade was expecting even larger projections, analysts said.
The USDA pegged 2014/15 US corn production at 14.48 billion bushels, with average pre-report guesses at 14.52 billion bushels. In September, the crop was estimated at 14.40 billion bushels.
Spillover pressure from the weakness in soybeans and expectations of large South American corn production this year also weighed on corn prices.
WHEAT futures were mixed in the US, with Kansas City and Chicago and Minneapolis futures finishing unchanged to six cents US per bushel higher. Minneapolis futures were unchanged to three cents US per bushel lower.
Domestic and global ending stocks of wheat were pegged lower than expected in the USDA’s monthly report, which sent some prices higher. The USDA pegged US 2014/15 ending stocks at 654 million bushels, down from 698 million bushels last month. Pre-report estimates called for ending stocks to be at 704 million bushels.
World ending stocks were estimated at 192.6 million bushels for 2014/15, which compares with pre-report guesses of 196.8 million bushels.
Ongoing worries about dry conditions in Australia and Brazil were also supportive, though beneficial rainfall expected for newly planted US winter wheat crops this weekend was bearish.
• The USDA lowered their wheat production estimates slightly for Argentina, Australia, Canada, North Africa, Kazakhstan, and FSU-12. They also upped production estimates slightly for wheat in EU-27, Pakistan, India and Ukraine. Estimates for wheat production in Brazil, China, Mideast, and Russia were left unchanged.
• FranceAgriMer, France’s farm office, estimated that soft wheat ending stocks for 2014/15 will total 4.4 million tonnes, the highest in 10 years.
• Harvested area for wheat in Russia was lowered by the country’s government, meaning production won’t like top 58.5 million tonnes this season, according to reports.
