By Phil Franz-Warkentin, Commodity News Service Canada
December 10, 2014
Winnipeg – ICE Futures Canada canola contracts settled lower on Wednesday, as losses in the CBOT soy complex spilled over to weigh on values.
The monthly USDA supply/demand report was relatively neutral as far as soybeans were concerned, but confirmation of the large global supply situation was enough to trigger a sell-off in the US futures, according to traders who also pointed to the continued weakness in crude oil as a bearish influence overhanging the agricultural markets.
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Ideas that canola was due for a correction of its own, following recent advances, also put some pressure on values.
However, the losses in canola were tempered by the weaker Canadian dollar, a continued lack of significant farmer selling, and steady end user buying interest. The fact that the nearby January contract remained at an inverse to the more deferred positions was seen as a sign of the solid nearby demand.
About 38,698 canola contracts were traded on Wednesday, which compares with Tuesday when 32,551 contracts changed hands. Spreading accounted for 29,096 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were down by 10 to 18 cents per bushel on Wednesday, as the market had a ‘buy the rumour, sell the fact’ reaction to the monthly USDA supply/demand report out this morning.
The USDA report was relatively neutral, if not supportive, as far as soybeans are concerned. Pointing to increasing export demand, the government agency lowered its ending stocks forecast for the crop by 40 million bushels. World ending stocks also saw a small downward revision, but the projected supplies at the end of the current crop year of 89.9 million tonnes, would still be well above last year’s 66.9 million tonne carryout.
Losses in crude oil were also a bearish influence overhanging the soybean market.
SOYOIL futures were down on Wednesday, taking some direction from the declines in crude oil.
SOYMEAL futures were down on Wednesday.
CORN futures in Chicago were steady to down two cents at Wednesday’s close.
US corn supplies by the end of next August are now forecast at 1.998 billion bushels by the USDA, down slightly from the previous estimate of 2.008 billion. However, world supplies are predicted to rise by 700,000 tonnes from the last report to 192.2 million tonnes.
WHEAT futures in Chicago were down by two to seven cents, as larger world supplies weighed on prices.
World wheat supply projections were revised higher by the USDA, with the global stocks by the end of this crop year now 2 million tonnes above the previous estimate, at 194.9 million tonnes. However, the world wheat carryout from last year, at 185.3 million tonnes, was actually a bit below trade guesses and did help temper the losses in wheat.
Uncertainty over Russian export intentions remained a background factor in the wheat markets, with today’s speculation leaning towards ideas that Russia will not be restricting sales despite talk to the contrary earlier in the week.
Settlement prices are in Canadian dollars per metric ton.
