By Dave Sims and Jade Markus, Commodity News Service Canada
Winnipeg, September 12 – THE ICE Futures Canada canola market suffered losses on Monday, as a bearish report from the United States Department of Agriculture weighed down the US soy complex.
The USDA hiked its forecast for US soybean production and ending stocks in 2016/17, which pushed down canola. The agency predicted that soybean production would hit 4.2 billion bushels, which was up 141 million bushels from the previous estimate. Ending stocks were also raised by 35 million bushels over the previous estimate.
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One Winnipeg-based trader said the global oilseed market had the potential to hit Canadian exporters rather hard, if China were to once again start refusing to accept shipments of Canadian canola due to complaints over dockage or any other reason.
“If we lose some China business and can’t replace it fully then we could again be headed towards a fairly large carryover. The issue becomes very critical and it’s quite possible this China issue could rear up again on the market,” he explained.
Harvest pressure was another factor dragging on prices.
However, the Canadian dollar was slightly weaker compared to its US counterpart, which made canola more attractive to out-of-country buyers.
Gains in crude oil were supportive along with reasonable demand.
Wet weather across the Canadian Prairies has put a weather premium into the market.
Around 14,736 canola contracts were traded on Monday, which compares with Friday when around 21,830 contracts changed hands.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade closed five to sixteen cents per bushel weaker on Monday, pressured by data from the United States Department of Agriculture (USDA).
The USDA expects soybean production in 2016/17 to reach 4.201 billion bushels, which is a record-high and a 141 million bushel increase from the previously estimated figure.
The government agency also raised yield estimates from 48.9 bushels per acre to 50.6 bushels an acre, which is bearish.
SOYOIL prices closed weaker on Monday, tracking declines in Malaysian palm oil.
SOYMEAL closed weaker on Monday.
CORN futures were mostly unchanged to about one cent per bushel weaker on Monday, as market watchers had expected a larger projected yield cut.
The USDA expects corn yields to reach 174.4 bushels per acre, which is lower than the previously estimated 175.1 bushels per acre.
Spill over weakness from the soybean market was also a feature.
WHEAT advanced two to seven cents per bushel on Monday, propped up by a cut in estimated wheat stocks.
The USDA downwardly revised global wheat stocks by 3.7 million to 249.1 million tonnes.
However, gains in the US dollar limited advances.
– The Russian wheat market is trending lower with sluggish demand, analysts say.
– Reports out of Australia say rains are benefitting the 2017 wheat crop.
