By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, March 12 – The ICE Futures Canada canola market weaker on Thursday, as speculators liquidated their positions to take profits on recent old crop, new crop spread activity, analysts said.
Ideas that Wednesday’s advances were overdone added to the bearish tone, as did spillover from the weakness seen in outside oilseed markets.
Further downward pressure came from the stronger Canadian dollar, as it made canola more expensive to exporters and crushers.
However, commercial demand remains steady, which helped to limit the declines in canola.
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Traders are also keeping a weather premium built into the new crop futures ahead of spring seeding, which was supportive.
About 25,510 contracts changed hands on Thursday, which compares with Wednesday when 22,374 contracts traded. Spreading accounted for 16,058 of the trades.
Milling wheat, durum and barley futures were all untraded, though the Exchange moved wheat prices higher after Thursday’s close.
CORN futures in Chicago ended one to two cents per bushel lower Thursday due to weaker-than-expected demand. Numbers from the USDA showed exporters booked sales of just 514,000 metric tonnes last week, which was the lowest total in two months.
An outbreak of bird flu at turkey farms in Arkansas and Missouri was also bearish for prices, as it could reduce demand for corn as a feed.
The strength of the US dollar is making it difficult for US corn to compete with Ukrainian corn on the international market, which was also undermining values.
The market will likely stick to its current sideways trading pattern, as farmers and traders wait to see the planting intentions and quarterly inventories report, brokers said. That is due at the end of the month.
SOYBEAN futures in Chicago finished two to four cents per bushel lower Thursday, as government stats showed disappointing results for exporters. Net sales last week totalled just-under 200,000 metric tonnes. That is well below analysts’ predictions of 300,000 and 575,000 tonnes.
While the July contract tested above the US$10.00 per bushel market, soybeans are locked into a range they can’t seem to escape from, said an analyst.
However, dry weather in parts of the US Southern Plains is threatening the potential of the new crop, according to a report.
WHEAT futures in Chicago finished higher Thursday on continued short-covering after the USDA’s surprisingly tight US and global ending stocks estimates on Tuesday, said an analyst.
There are concerns dryness in the US Southern Plains could hurt yields if spring rains stay away. Seventy percent of Oklahoma and 45 percent of Kansas were classified as experiencing “moderate drought.”
However, a continued lack of fresh export demand and the large global supply situation helped to limit the advances.
• Russia may export about five million tons of grain to the end of the agricultural year, according to the government’s agricultural agency.
• Saudi Arabian wheat imports are to reach a record high, as local production hits its lowest level since the 1950s.
• One of China’s chief economists reportedly believes the country should reduce its grain imports to 11 million tonnes a year.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
