By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
December 4, 2014
Winnipeg – ICE Futures Canada canola contracts traded to both sides of unchanged on Thursday in choppy activity, but managed to settle with small gains overall as spillover from the advances in CBOT soybeans countered a relatively bearish Statistics Canada production report.
StatsCan pegged this year’s canola crop at 15.55 million
tonnes, which beat average trade estimates and was nearly 1.5 million tonnes above the previous estimate.
However, while the headline number was bearish, the crop is still well below last year’s record production and solid end user demand continued to provide support, according to participants.
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In addition to the good exporter and domestic crusher buying interest, a lack of farmer selling, oversold price sentiment, a weaker Canadian dollar, and gains in CBOT soybeans were also supportive for canola.
About 38,015 canola contracts were traded on Thursday, which compares with Wednesday when 20,334 contracts changed hands. Spreading accounted for 24,392 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were nine to 12 cents US per bushel higher on Thursday, lifted by positive export sales data, analysts said.
According to the USDA, weekly export sales totalled 1.18 million tonnes during the week, which was better than expected.
However, the large US crop was limiting the advances, as were the good conditions for soybean crops in South America expected this week.
SOYOIL futures finished on Thursday, with weakness in crude oil values behind the losses, market watchers said.
SOYMEAL futures were stronger Thursday, with spreading against soyoil a feature of the activity. Spillover support from soybeans was also bullish, brokers said.
CORN futures in Chicago finished five to eight cents US per bushel higher on Thursday, reacting to strong weekly export sales data, analysts said.
According to the USDA, export sales totalled 1.17 million tonnes during the week, up 24 per cent from the week prior and above pre-report guesses.
However, ideas that the overall export pace for US corn is sluggish so far this year, despite positive sales this week, were also bearish.
WHEAT futures in the US were mixed to lower on Thursday, with Chicago futures holding steady, consolidating after Wednesday’s losses. Kansas City futures were four cents lower to two cents higher, while Minneapolis contracts were one to three cents softer.
Lackluster export demand for US wheat supplies, as the US dollar remains strong, was weighing on prices, as was the large global supply situation.
Statistics Canada upped their Canadian all wheat production estimate to 29.28 million tonnes, from their previous guess of 27.48 million tonnes. But, production is still below the record large 37.53 million tonne crop seen last year.
On the other side, worries about cold weather in the US, Ukraine and Russia lowering winter wheat production remained supportive.
• Japan purchased 146,660 tonnes of wheat, with 120,580 tonnes of that coming from the US, reports said.
• Weekly export sales for the week ended November 27 totalled 319,200 tonnes, according to the USDA.
• Grain exports out of Russia could reach the 2.9 to 3.0 million tonne level in December, a Russian strategic marketing company said.
Settlement prices are in Canadian dollars per metric ton.
