By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, February 10 – THE ICE Futures Canada canola market finished weaker after an extremely volatile session Tuesday. A sharp drop in the Canadian dollar initially boosted canola values however those gains were offset by losses in the US soy complex.
A report by the USDA said US stockpiles of soybeans would be smaller than initially expected. Projections for Brazil’s soybean crop were slightly lower than last month’s forecast as well. Despite that, the entire global harvest is still expected to be a record one which was bearish for canola values.
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Many funds began to move their March positions into May, said an analyst.
“Unless we get May canola under US$440.00 (per tonne) we’re not going to see the funds liquidate their long position, they’re just going to spread their long March (position) into May,” said the analyst.
A lack of farmer selling helped limit the losses while many crushers also stayed on the sidelines due to poor crush margins.
Around 20,010 canola contracts were traded on Tuesday, which
compares with Monday when around 19,194 contracts changed hands.
Spreading accounted for 16,194 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade were down four to 11 cents per bushel on Tuesday, as the market had a ‘buy the rumour, sell the fact’ reaction to the monthly USDA supply/demand report.
The USDA cut its ending stocks projection for soybeans in the country by 25 million bushels, to 385 million bushels. Average trade guesses had been for a much smaller reduction, and the tighter supply projections were somewhat supportive for soybeans. Global stocks were also revised lower to 89.26 million tonnes, from 90.44 million, as demand projections were raised.
While the tightening stocks projections were somewhat supportive, traders noted that the supplies were still very large overall.
The advancing South American soybean harvest also weighed on values. The USDA pegged Brazil’s soybean production at 94.5 million tonnes, which would be down slightly from earlier estimates but still record large.
SOYOIL futures were down on Tuesday, with declines in crude oil and outside vegetable oil markets behind some of the selling pressure.
SOYMEAL futures finished lower on Tuesday, following soybeans.
CORN futures in Chicago were down by two to three cents per bushel, as rising world supply projections and losses in wheat weighed on prices.
US corn ending stocks were forecast at 1.827 billion bushels in the latest monthly USDA report, which was down by 50 million bushels from the January estimate. Corn ending stocks were also tighter than expectations, which was a bit supportive.
However, world corn stocks beat expectations at 189.64 million tonnes.
WHEAT futures in Chicago were down by four to nine cents per bushel as the market had a bearish reaction to the monthly USDA supply/demand report.
US wheat ending stocks were forecast at 692 million bushels, which was up by 5 million from the January estimate. Expensive US wheat was said to be making the grain less competitive in the global market, and the USDA also lowered its domestic export estimate.
World wheat stocks were also upped to 197.85 million tonnes by the USDA, adding to the bearish undertone in wheat.
– Australia’s Abares pegged that country’s wheat crop at 23.22 million tonnes, which was up by 385,000 tonnes from an earlier estimate. Barley and canola production in the country was also revised higher.
– Political turmoil in Libya could see the country use up all of its wheat reserves in the next three months unless a state fund is provided with the money it needs to purchase more grain, according to an official in the country.
– Ukraine’s winter grain crops are rated 82% good and satisfactory, according to the country’s agriculture ministry.
– Bangladesh has tendered to purchase 100,000 tonnes of wheat, according to reports.
