By Terryn Shiells and Phil Franz-Warkentin, Commodity News Service Canada
WINNIPEG, May 28 – ICE Futures Canada canola contracts were stronger on Wednesday, seeing a short covering correction as Tuesday’s losses were seen as overdone, analysts said.
Bargain hunting by commercials after Tuesday’s price drop further underpinned values, as did slow farmer selling.
Continued ideas that canola is undervalued compared to other oilseeds added to the bullish tone, as did ongoing concerns about planting delays in the eastern Canadian Prairies.
However, generally good weather expected for planting in Western Canada this week limited the upside. Spillover pressure from the weakness in Chicago soyoil futures also tempered the gains.
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Tuesday’s declines shifted the market’s bias to the downside, which was bearish for prices as well.
About 33,042 canola contracts were traded on Wednesday, which compares with Tuesday when 26,539 contracts changed hands.
Milling wheat, durum and barley futures were untraded following price revisions after Tuesday’s close.
SOYBEAN futures at the Chicago Board of Trade were up three to nine cents per bushel on Wednesday, seeing a modest correction following Tuesday’s sharp declines.
Solid export demand contributed to the gains, with the USDA confirming a fresh 110,000 tonne sale to China for delivery in the upcoming 2014/15 crop year.
However, the advances were tempered by the good seeding pace seen across the Midwest and large crop prospects. The US soybean crop was 59% seeded as of this past Sunday, according to the USDA. The seeding pace was three points ahead of the five-year average.
SOYOIL futures were down on Wednesday, as adjustments to the soyoil/soymeal spread weighed on values.
SOYMEAL futures were stronger on Wednesday, following soybeans.
CORN futures in Chicago were up two to four cents per bushel on Wednesday, after chopping around both sides of unchanged.
The US corn crop was 88% seeded as of this past Sunday, according to the USDA, which was in line with trade expectations.
Relatively favourable weather conditions for crop development across the Midwest initially weighed on corn futures, taking prices to their weakest levels in over two months.
However, oversold price sentiment and end-user bargain-hunting at the lows helped corn move back above unchanged as the day progressed.
WHEAT futures in Chicago settled two to three cents per bushel lower on Wednesday, as improving US crop prospects weighed on values. Minneapolis and Kansas City futures posted similar declines.
The US winter wheat crop was rated as 30% good-to-excellent in the latest weekly report, which was an improvement of one percentage point from the previous week. Kansas, Oklahoma, and Texas all received some much needed moisture recently, which should help boost the yield prospects for the wheat crops there and lead to further quality improvements in next week’s USDA report.
Spring wheat seeding in the country beat expectations in weekly USDA report, which was also bearish for wheat values.
• Rainfall in wheat growing regions of Ukraine and Russia was helping crop prospects improve there, according to a report from Commodity Weather Group.
• The Australian Bureau of Meteorology is forecasting below-average rainfall across much of the agricultural regions of the country over the June to August period.
• Egypt, the world’s largest wheat importer, is considering changes to its wheat import specifications, according to reports. Included in the changes would be a relaxation of rules on moisture content.
ICE Futures Canada settlement prices are in Canadian dollars per metric ton.
