By Phil Franz-Warkentin and Terryn Shiells, Commodity News Service Canada
February 4, 2015
Winnipeg – ICE Futures Canada canola contracts were mixed on Wednesday, although the bias was lower in the most active front months as losses in CBOT soybeans encouraged some speculative selling in the Winnipeg market as well.
The large old crop canola supplies that still need to move through the system, as confirmed in the latest stocks numbers released by Statistics Canada this morning, contributed to the softer tone in canola, according to participants. The agency reported that the country’s canola stocks, as of December 31, 2014, came in at 11.1 million tonnes. While that was down the same time from the previous year, supplies were still at the high end of pre report estimates and were seen as a sign that ending stocks projections may also need to be revised higher.
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The losses in canola were tempered by the weakening Canadian dollar, which was trading back below 80 US cents after jumping sharply earlier in the week. The softer currency was supportive for crush margins, and domestic processors continued to show steady demand, according to participants.
About 15,644 canola contracts were traded on Wednesday, which compares with Tuesday when 19,959 contracts changed hands. Spreading accounted for 12,380 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
CBOT SOYBEAN futures ended 11 to 16 cents US per bushel lower on Wednesday, undermined by profit taking following Tuesday’s rally.
Further downward pressure came from generally favourable conditions for South America’s projected record large soybean harvest and the large global supply situation.
A lack of fresh demand news was also overhanging the market, as was strength in the US dollar index, analysts said.
SOYOIL futures were also softer, following the declines seen in soybeans.
SOYMEAL futures were down sharply, giving back some of Tuesday’s sharp advances as traders took profits, brokers said.
CORN futures in Chicago finished lower Wednesday, seeing losses of two to four cents US per bushel. Profit taking on Tuesday’s gains was also bearish for corn.
The strengthening US dollar and softening crude oil market added to the weaker tone, as did signs of slowing demand from the domestic ethanol industry.
However, expectations that US farmers will lower their corn acreage at planting time this spring helped to limit the downside.
WHEAT futures in the US ended weaker as well, with Chicago, Minneapolis and Kansas City futures ending three to 12 cents US per bushel higher.
Wheat markets were reacting to concerns that recent weak prices won’t be enough to make US wheat more competitive on the export market.
The strengthening US dollar index was also undermining values, as was the large global supply situation, according to traders.
However, worries about cold weather damaging some US winter wheat crops this week, as some regions don’t have enough snow cover, tempered the declines.
• All wheat stocks in Canada totalled 24.82 million tonnes as of December 31, 2014, down from 28.68 million tonnes at the same point in 2013, Statistics Canada data shows.
• South Korea purchased 50,000 tonnes of wheat, to be sourced from Australia, according to reports.
• Libya is tapping into its strategic wheat reserves as political turmoil has caused issues with importing goods by road and ships, reports say.
Settlement prices are in Canadian dollars per metric ton.
