By Phil Franz-Warkentin, Commodity News Service Canada
November 14, 2014
Winnipeg – ICE Futures Canada canola contracts moved higher on Friday, despite losses in CBOT soybeans, as the oversold Canadian market saw some consolidation to end the week.
Losses in CBOT soybeans put spillover pressure on canola throughout the day, according to participants. The Canadian dollar was also stronger, and the resulting softness in crush margins was bearish for canola.
However, canola has seen some wide price swings over the past week, and was due for a correction from a chart standpoint as the Canadian oilseed was said to be looking cheap compared to soybeans.
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Farmers moved back to the sidelines, after making some sales earlier in the week, which was also supportive for canola, said traders.
About 17,034 canola contracts were traded on Friday, which compares with Thursday when 28,930 contracts changed hands. Spreading accounted for 4,582 of the contracts traded.
Milling wheat and durum were both untraded, while barley moved higher in light activity.
SOYBEAN futures at the Chicago Board of Trade were down 10 to 31 cents per bushel per bushel on Friday, with speculative profit-taking behind much of the weakness.
The USDA numbers also included some cancellations of soymeal sales that had already been on the books, as high US prices and logistics issues across the Midwest are forcing end users to look to alternative sources such as South America.
A report from private forecasters Informa Economics predicting record large US soybean plantings in 2015 weighed on prices as well. The company forecast soybean area at 88.3 million acres, which would be up by 4.1 million from 2014.
SOYOIL futures finished higher on Friday, with spreading against soymeal behind some of the strength.
SOYMEAL futures were down on Friday.
CORN futures in Chicago were down four to five cents per bushel on Friday, with some spillover selling coming from the declines in soybeans.
Corn hit its highest levels in four months on Thursday, and was due for a correction from a chart standpoint. The recent strength also encouraged an increase in farmer selling, which contributed to the declines, said traders.
However, Informa’s acreage numbers were somewhat supportive, as much of the increase in soybean area is expected to come at the expense of corn. Informa forecast next year’s US corn acreage at 88.3 million acres as well, which would be down from the 90.9 million acre crop grown this year.
WHEAT futures in Chicago were up five to seven cents per bushel on Friday.
Forecasts calling for cold snowy weather across much of the central US accounted for some of the strength, as the adverse weather could cause some damage to the winter wheat crops.
There were also ideas that some speculative money was leaving soybeans and being moved into wheat instead.
Informa forecast total US wheat acres in 2015 at 56.8 million acres, which would be in line with the 2014 area. Of that total, winter wheat is forecast at 42.2 million acres, which was up by about half a million acres from its previous estimate.
Settlement prices are in Canadian dollars per metric ton.
