By Terryn Shiells and Dave Sims, Commodity News Service Canada
WINNIPEG, Sept. 11 – ICE Futures Canada canola contracts ended weaker on Thursday, hitting fresh lows during the session. The November contract fell to C$409 per tonne at one point on Thursday, but chart support held and prices managed to close above the lows of the day, analysts said.
Spillover pressure from the losses seen in Chicago soybean futures, after the USDA report showed higher than expected US bean production of 3.9 billion bushels, was bearish.
Some of the price softness was also linked to ideas that frost in Western Canada this week won’t do much damage to canola crops.
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A recent pickup in farmer selling, as harvest is underway in some areas, further undermined prices.
However, weakness in the value of the Canadian dollar helped to limit the declines, as it made canola more attractive to crushers and exporters.
The need to keep a weather premium built into prices until canola is fully in the bin was also supportive.
About 16,401 contracts traded on Thursday, which compares with Wednesday when 6,711 contracts changed hands.
Milling wheat, durum and barley futures were untraded, though the Exchange moved wheat prices lower after Thursday’s close.
CORN futures in Chicago fell three to five cents per bushel lower Thursday, as the USDA’s monthly crop report said US farmers will harvest 14.395 billion bushels this season, above last month’s forecast of 14.032 billion bushels.
Favourable growing conditions across much of the US Corn Belt are credited with sparking the increase.
The USDA pegged US corn yields at 171.7 bushels an acre, which is above the previous record of 164.7 billion bushels.
Margins remain strong in the ethanol sector which lent some slight support to the market, according to a report.
SOYBEAN futures at the Chicago Board of Trade settled lower, losing 11 to 13 cents per bushel on the day, after federal forecasters estimated soybean production at 3.913 billion bushels on yields of 46.6 bushels an acre. Both of those marks would be new records.
Favourable weather conditions were cited as a big reason behind the increase. Above-average moisture levels in certain regions of the Midwest are helping protect against frost potential too, said a trader.
The lower price levels for soybeans are prompting speculation cattle-ranchers may look to the commodity as an alternative source of feed.
SOYOIL futures ended lower on Thursday, in sympathy with soybeans, said an analyst.
SOYMEAL futures also recorded losses on the day.
WHEAT futures in Chicago finished nine to 11 cents per bushel lower on Thursday, in response to the USDA’s monthly report which pegged world wheat ending stocks at 196.38 million tonnes, above expectations. In contrast, last month’s projection called for just 192.96 million tonnes.
The boost is largely being attributed to rising production in Ukraine and other parts of Europe, which is reportedly up by 5 million tonnes.
US domestic stockpiles at the end of the 2014/15 season, next May 31, are pegged at 698 million bushels. That is above last month’s forecast and also above trade guesses of 664 million bushels.
• France’s soft-wheat exports are expected to lose 15 percent of their quality due to wet summer weather.
• Ukraine’s Ministry of Agrarian Policy reports the country has exported 6.22 million metric tonnes of grain since the beginning of 2014/15.
• Kazakhstan expects to increase its wheat exports by 5 times once a rail-line connecting it to Iran is open. The line is expected to start operations by November.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
