By Phil Franz-Warkentin, Commodity News Service Canada
March 20, 2015
Winnipeg – ICE Futures Canada canola contracts were weaker at Friday’s close, retreating from earlier advances as end-of-the-week profit-taking and a rising Canadian dollar weighed on values.
A rally in CBOT soybeans did provide some underlying support for canola throughout the day. However, canola was already up on Thursday, when beans moved lower, and was starting to look overpriced, according to participants accounting for Friday’s relative weakness.
A sharp rise for the Canadian dollar relative to its US counterpart was also bearish for canola, as the rising currency makes exports less attractive to international buyers and cuts into domestic crush margins.
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The large South American soybean crop continued to weigh on the oilseeds in general as well, said participants.
About 14,221 canola contracts were traded on Friday, which compares with Thursday when 14,579 contracts changed hands. Spreading accounted for 10,040 of the contracts traded.
Milling wheat and durum futures were untraded, while barley values moved higher in light activity.
SOYBEAN futures at the Chicago Board of Trade were up by 10 to 12 cents per bushel on Friday, with much of the strength tied to weakness in the US dollar.
In addition to the currency related strength, soybeans also found some support from solid nearby demand. Concerns over harvest delays in parts of Brazil were also said to be a bit supportive, although the large South American crops did remain a bearish influence overall.
Private forecasters, Informa Economics released updated acreage estimates today, pegging US soybean seedings at 87.5 million acres this spring. That would be down slightly from the company’s previous forecast, but still well above the record 83.7 million acres US farmers planted to the crop in 2014.
SOYOIL futures settled with small gains on Friday after trading to both sides of unchanged.
SOYMEAL futures were higher on Friday, following soybeans.
CORN futures in Chicago were up by nine to 11 cents, as the corn market also benefited from the weakening US currency.
Informa forecast US corn plantings this spring at 88.5 million acres, which would compare with the 90.6 million acres seeded last year. The USDA releases its own acreage estimates on March 31, and more trade guesses will be coming forward over the next week.
WHEAT futures in Chicago were up by 15 to 18 cents per bushel on Friday, hitting their highest levels in a month. Minneapolis and Kansas City wheat futures also posted gains of 16 to 19 cents per bushel.
The weaker US dollar made US wheat less expensive for international buyers, which could bode well for future export demand.
Weather concerns in parts of the US Plains added to the firmer tone in wheat, with a lack of significant moisture in the forecasts for many of the drier areas.
Settlement prices are in Canadian dollars per metric ton.
