By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
January 15, 2015
Winnipeg – ICE Futures Canada canola contracts were lower on Thursday, as losses in CBOT soybeans spilled over to weigh on prices.
Activity was on the choppy side in canola, as volatility in the outside currency and energy markets served to keep some caution in the grains and oilseeds, according to a broker.
Speculative fund buying had provided some support early in the day. However, canola ran into resistance to the upside after hitting its best levels in six months, and the turn lower in soybeans triggered a round of liquidation in the Canadian market as well.
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A slowdown in end user demand, with many commercials thought to be covered for the time being, contributed to the softer tone, said traders.
About 24,438 canola contracts were traded on Thursday, which compares with Wednesday when 27,138 contracts changed hands.
Milling wheat and durum were both untraded, but barley moved higher in light commercial activity.
CBOT SOYBEAN futures ended 14 to 18 cents US per bushel lower on Thursday, reacting to disappointing domestic crush data, analysts said.
According to the National Oilseed Processors Association, 165.4 million bushels of US soybeans were crushed last month, up from 161.2 million bushels in November, but below expectations of 166.8 million bushels.
Generally favourable weather for the South American soybean crop ahead of harvest added to the bearish tone, as did chart-based selling.
However, positive weekly export sales data tempered the declines. The USDA said US soybean export sales totaled 1.13 million tonnes during the week ended January 8, up 24 per cent from the week prior.
SOYOIL futures were firmer Thursday, as ongoing worries about reduced Malaysian palm oil production underpinned values, traders said.
SOYMEAL futures were sharply weaker, undermined by spreading against soyoil, brokers said.
CORN futures in Chicago finished one to two cents US per bushel softer on Thursday, reversing gains seen earlier in the trading session.
Spillover pressure from the declines seen in soybeans weighed on the market, participants said.
However, rising crude oil values and signs of improving demand for US corn were supportive. The USDA announced a fresh export sale of 127,000 tonnes of corn headed to Japan.
WHEAT futures in the US ended mixed with Chicago futures up five cents US per bushel lower, Kansas City ranging from three cents lower to 13 cents higher, and Minneapolis steady to four cents stronger.
Chicago futures were weaker, taking some direction from the CBOT soybean market, analysts said.
Improving weather for US winter wheat crops in the southern Plains was bearish, as was ongoing strength in the US dollar index.
Further downward pressure came from disappointing weekly export sales data, which showed sales totalling 377,200 tonnes.
On the other side, oversold price sentiment was supportive for wheat futures, as was short covering following recent sharp losses.
• Strategie Grains, a marketing group based in the European Union, estimated 2014/15 EU soft wheat exports at 29.3 million tonnes, an increase of 2.1 million tonnes from their previous guess.
• A private US market analyst group released 2015/16 acreage figures on Thursday, pegging US winter wheat area at 40.452 million acres.
• Ukraine’s Hydrometeorological Center said winter wheat crops in the country are in full dormancy, and aren’t being threatened by cold temperatures.
Settlement prices are in Canadian dollars per metric ton.
