By Dave Sims and Phil Franz-Warkentin
Winnipeg, March 3 – THE ICE Futures Canada canola market finished weaker on Tuesday, as strength in the Canadian dollar weighed down values. The firmer loonie made canola less attractive to domestic crushers and international buyers.
Losses in US soybeans and soymeal also undermined values.
Technical indicators were bearish, according to an analyst who said canola was vulnerable to additional setbacks.
“It wouldn’t take much to have a five or ten dollar down day in canola and get the canola down around $460 (May contract),” said the analyst.
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However, spring road bans in Western Canada helped to limit the losses while producer selling has been on the slower side.
Strength in soyoil also helped underpin the market.
A truckers’ strike in Brazil is pretty much over and did not cause as many disruptions to the soybean supply as some analysts had initially thought.
Around 18,630 canola contracts were traded on Tuesday, which
compares with Monday when around 24,952 contracts changed hands.
Spreading accounted for 10,542 of the contracts traded.
Milling wheat, barley and durum were all untraded.
SOYBEAN futures at the Chicago Board of Trade were narrowly mixed at Tuesday’s close after seeing large price swings throughout the day. The nearby months were down one to two cents per bushel, while the more deferred months were up a couple of pennies. Bearish technical signals and easing concerns over the trucker strike in Brazil weighed on values in the front months.
There were only 18 roadblocks reported in Brazil today, which compares with last week when the labour dispute saw truckers in the South American country blocking over 100 routes.
With many key highways open again, market participants expect more soybeans will be moving to export positions at the coast which would cut into the demand for US supplies.
Chart support did hold to the downside, as the May contact neared the psychological US$10 per bushel mark.
Private forecaster Informa released updated production estimates on Tuesday pegging Brazil’s soybean crop at 92.5 million tonnes. That was down from an earlier estimate, but would still represent a record for the country. Informa also noted that Brazil’s soybean harvest was currently 26% complete, which was behind the previous year’s pace of 41% done.
SOYOIL futures were up slightly on Tuesday, with positioning against soymeal behind some of the activity.
SOYMEAL futures settled with small losses on Tuesday, but well off their session lows.
CORN futures in Chicago were up one to three cents per bushel on Tuesday, with a bounce in the wheat market providing some spillover support.
Informa lowered its estimate on the size of Brazil’s soybean crop by 450,000 tonnes, to 72.4 million. However, the company raised its estimate for Argentina’s corn crop by 500,000 tonnes, to 23.5 million.
WHEAT futures in Chicago finished one to six cents per bushel higher on Tuesday, as the market saw a correction off of nearby lows as bargain-hunting came forward to provide some support. Minneapolis and Kansas City futures posted even larger gains, with Minneapolis futures up as much as 15 cents per bushel and Kansas City up nine cents.
Crop ratings for the US winter wheat crop were mixed in the latest USDA report, with some states seeing slight improvements and downgrades reported in others. The uncertainty over the extent of the damage caused over the winter was somewhat supportive.
– Australia’s ABARE is forecasting wheat production in 2015/16 at 24.39 million tonnes, which would be up 3% from 2014/15 production.
– Wheat production in northern India will be downgraded due to unseasonably heavy rainfall, according to reports.
