By Phil Franz-Warkentin, Commodity News Service Canada
November 10, 2014
Winnipeg – ICE Futures Canada canola contracts traded to both sides of unchanged on Monday, but managed to finish with small gains despite a turn lower in CBOT soybeans.
The USDA released its latest supply/demand projections Monday morning, and a bearish response to the record large production forecast and burdensome carry-projection from the CBOT soy complex spilled over to weigh on canola for part of the day.
The January canola contract had been trading above unchanged, but lost as much as four dollars per tonne in immediate response to the USDA report and subsequent losses in soybeans.
Read Also
North American grain/oilseed review: Canola corrects higher
Glacier FarmMedia — The ICE Futures canola market settled higher for the first time in over a week, with chart-based…
However, while soybeans stayed lower, canola managed to return to the upside by the close. Good end user demand from both exporters and domestic crushers, together with a lack of significant farmer selling, provided some support for canola.
A weaker tone in the Canadian dollar, which moved back below 88 US cents, was also supportive, according to participants.
About 13,081 canola contracts were traded on Monday, which compares with Friday when 23,863 contracts changed hands. Spreading accounted for about 7,664 of the contracts traded.
Milling wheat, durum, and barley were all untraded and unchanged.
SOYBEAN futures at the Chicago Board of Trade were down 8 to 13 cents per bushel on Monday, as the market reacted bearishly to the USDA’s monthly supply/demand projections released during the session.
This year’s US soybean crop was pegged at a record 3.96 billion bushels by the USDA, with average yields of 47.5 bushels per acre. The large production was right in line with market expectations, but the ending stocks projection of 450 million bushels was unchanged from the previous month. The stocks number came as a bit of a surprise to analysts who had been anticipating a tighter reading due to expected increases in demand.
The US soybean harvest is also nearing completion, which contributed to the softer tone in the futures.
However, good export demand on the other side did remain a supportive influence.
SOYOIL futures finished with small losses on Monday, but well off their lows for the day as spreading against soymeal provided some support.
SOYMEAL futures were lower on Monday, as the market reacted to the updated USDA supply/demand projections.
CORN futures in Chicago were up one to two cents per bushel on Monday, as the USDA report was generally supportive as far as corn was concerned.
While the US corn crop is still expected to be record large at 14.41 billion bushels, the production estimate was unexpectedly lowered from the even larger forecast put out in October of 14.48 billion. Average yield projections were also revised slightly lower, to 173.4 bushels per acre.
US corn ending stocks for the current crop year were revised lower as well, and came in below trade guesses at 2.01 billion bushels.
WHEAT futures in Chicago were up one to three cents per bushel on Monday, with some spillover support coming from the gains in corn.
The USDA lowered its US wheat ending stocks forecast by 10 million bushels, to 644 million, which was well below pre-report forecasts calling for a slight increase in the carryout.
While the tightening domestic supplies were somewhat supportive, the world numbers included a slight increase in the global stock situation which tempered the upside potential in the futures. The USDA is forecasting world wheat stockpiles for 2014/15 192.9 million tonnes, from 192.6 million last month.
Settlement prices are in Canadian dollars per metric ton.
