By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
November 3, 2014
Winnipeg – ICE Futures Canada canola market settled lower for the first time in six sessions on Monday, as losses in the CBOT soy complex provided the catalyst for a profit taking correction in the Canadian market as well.
The advancing US soybean harvest and improving weather conditions for soybeans in Brazil weighed on the oilseeds in general, including canola, according to participants.
The recent strength of the market also encouraged some farmer selling.
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However, many producers are also starting to feel more bullish. As a result, solid commercial demand on the other side helped temper the declines as exporters and domestic crushers were being forced to pay up in order to keep the deliveries coming.
A weaker tone in the Canadian dollar, which was down sharply relative to its US counterpart, was also a supportive influence for canola.
About 20,897 canola contracts were traded on Monday, which compares with Friday when 22,794 contracts changed hands. Spreading accounted for about 11,732 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures in Chicago dropped 13 to 19 cents per bushel Monday on weather forecasts that call for improved conditions in the US Midwest.
Rainfall in Brazil has also been bearish for values as the moisture is expected to benefit regions plagued by dry conditions.
Imports of soymeal from South America have eased the increased demand for the commodity that markets witnessed last week, participants said.
The 100-day moving average is causing resistance for the January contract. The resistance level is pegged at US$10.54 per bushel.
SOYOIL futures were 77 points lower on Monday, following soybeans.
SOYMEAL futures corrected lower after surging last week due to shortages caused by railcar issues.
CORN futures in Chicago fell three cents per bushel lower Monday on favourable weather forecasts and stronger farmer selling of new-crop contracts.
Cheaper corn from other parts of the world was bearish for values, according to a report.
WHEAT futures in Chicago ended three to five cents higher on speculation that world supplies may not be as plentiful as previously thought.
Weakness in the Russian currency and a strengthening US dollar indicates demand for US wheat could be weaker going forward, an analyst said.
Funds have been short-covering themselves which has been supportive, according to a report.
Rain is forecast for the US Southern Plains which is bearish, said analysts.
– Venezuela is expected to increase its grain imports due to rising domestic food demand as well as the animal feed industry, according to a report.
– France has overtaken Russia at the biggest client for Egypt’s grain authority, participants said. One recent purchase reportedly saw Egypt buying 60,000 tonnes of French grain, for US$260 a tonne including freight.
– Poor weather and currency issues will reduce Russian and Ukrainian wheat output by a combined 10 million tonnes next year, according to a report.
Settlement prices are in Canadian dollars per metric ton.
