By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG – The ICE Futures Canada canola market was mixed on Tuesday, after a day of choppy activity. Volumes were on the light side, which exaggerated the price swings, analysts said.
Support came from weakness in the Canadian dollar, as it made canola more attractive to crushers and exporters.
Steady commercial buying interest and signs of good export demand, as China reportedly bought Canadian canola last week, added to the bullish tone.
On the other side, spillover pressure came from the declines seen in Chicago soybeans, Malaysian palm oil and European rapeseed futures.
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The record large South American soybean crop was also overhanging the market.
About 17,032 contracts changed hands on Tuesday, which compares with Monday when 9,674 contracts traded. Spreading accounted for 8,978 of the trades.
Milling wheat, durum and barley futures were all untraded and unchanged.
SOYBEAN futures in Chicago settled six to nine cents per bushel lower Tuesday, as the USDA shirked expectations and projected US stockpiles on August 31 to total 385 million bushels, which was the same amount in its previous forecast. Analysts had predicted tighter ending stocks in their pre-trade guesses.
The pace of soybean sales has also started to decline, said a participant. While China recently made larger-than-expected purchases other countries have shifted their attention to the soybean crop in South America.
Global stockpiles of soybeans will hit 89.5 million metric tonnes, according to the USDA forecast, that is slightly higher than February’s forecast of 89.3 million.
SOYOIL futures in Chicago finished fractionally lower, following weakness in Malaysian palm oil futures.
SOYMEAL futures ended lower following soybeans.
CORN futures in Chicago ended steady to one cents US per bushel lower on Tuesday.
Futures initially rose on USDA estimates that 2014/15 ending stocks of corn would total 1.777 billion bushels, which was below analysts’ expectations.
However speculative selling and spillover pressure from wheat and corn sent values slightly below unchanged.
Farmers may be convinced to plant more corn this year due to the new USDA forecast, suggested a trader.
The USDA pegged global corn stockpiles in the 2014/15 season at 185.3 million metric tonnes, which was below the previous forecast of 189.6 MMT.
WHEAT futures in Chicago finished two to three cents per bushel higher Tuesday, and four to five cents per bushel higher on the Kansas City Board of Trade, as the USDA pegged global supplies at a lower level than expected. World-wheat supplies will hit 197.7 million metric tonnes this year, which was lower than the previous forecast of 197.9 million tonnes.
US wheat inventories were also pegged at a lower total than in February. The USDA believes inventories as of May 31 will hit 691 million bushels, down one million bushels from the previous forecast.
However, strength in the US dollar and a continued lack of fresh export demand limited the gains.
• Peru is expected to import 1.9 million tonnes of wheat in 2015/16, according to a report.
• The European Union wheat harvest, the world’s biggest, will stay above 150 million tonnes this year, but exports will drop, allowing a rise in inventories to the highest in seven year, said an analyst.
• Russia imported 11.8% more grain in February than the month before, according to a report.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
