By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
January 12, 2015
Winnipeg – ICE Futures Canada canola contracts were mostly lower at Monday’s close, as losses in the CBOT soy complex spilled over to weigh on prices.
CBOT soybeans and soyoil had a bearish reaction to updated USDA supply/demand data out this morning, which accounted for much of the selling pressure in canola, according to participants.
However, canola lagged soybeans to the downside somewhat, as weakness in the Canadian dollar provided some relative support.
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The currency moved below 84 US cents on Monday, having lost about three-quarters of a cent to trade at its weakest levels since 2009. The softer Canadian dollar compensated for the declines in Chicago, as it makes canola more attractive to both exporters and domestic crushers, said traders.
About 23,758 canola contracts were traded on Monday, which compares with Friday when 17,759 contracts changed hands. Spreading accounted for 10,036 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures ended sharply lower, with losses of 25 to 38 cents US per bushel on Monday. The market was reacting to a bearish USDA report, analysts said.
The USDA increased their 2014/15 US production estimate to 3.969 billion bushels, beating pre-report expectations. The agency left their domestic ending stocks figure unchanged at 410 million bushels, which was above pre-report guesses of 402 million bushels.
Expectations that buyers will soon shift to South America for soybean supplies added to the bearish tone, with good weather in Brazil and Argentina also undermining values.
SOYOIL futures were down sharply on Monday, reacting to the bearish USDA report.
SOYMEAL futures were also down with the larger than expected US soybean production estimates from the USDA, traders said.
CORN futures in Chicago finished one to five cents US per bushel higher on Monday, as the USDA report had some supportive figures for corn, brokers said.
The USDA lowered its 2014/15 US production estimate to 14.216 billion bushels, down from their last estimate of 14.407 billion, and pre-report guesses calling for about 14.366 billion bushels. The USDA also lowered US ending stocks for 2014/15 to 1.877 billion bushels, from 1.998 billion bushels last month.
But, larger than expected US corn stocks as of December 1, 2014, limited the gains. The USDA said stocks were at 11.203 billion bushels, above expectations and about seven per cent higher compared to a year ago.
WHEAT futures in the US ended lower, with Chicago Board of Trade, Minneapolis and Kansas City futures ending six to 11 cents US per bushel weaker as the USDA’s ending stocks estimates were higher than expected.
Domestic ending stocks were pegged at 687 million bushels for 2014/15, up from the December forecast of 654 million bushels.
Continued strength in the US dollar index was also bearish, as it made US wheat more expensive to foreign buyers, participants said.
However, signs that US farmers will produce less wheat in 2015/16 limited the downside. According to the USDA, 40.5 million acres of winter wheat were planted in the US this fall, down from 42.4 million acres last year.
• Weekly export inspections in the US were at 352,829 tonnes, according to data released by the USDA.
• Ukraine doesn’t have any plans to curb wheat exports, the country’s Ag Minister said. Officials will meet this week to discuss the futures of wheat exports.
• South Korea purchased 266,000 tonnes of hard wheat, while Turkey purchased 60,000 tonnes over the weekend, reports show.
Settlement prices are in Canadian dollars per metric ton.
