By Dave Sims and Phil Franz-Warkentin
The ICE Futures Canada canola market was stronger on volatile trading Tuesday – following the soy complex higher.
There were no big fundamental trends pushing canola one way or the other, according to an analyst.
“Hard to see any huge directions this time of year,” he said, noting some price pressure was still being felt from the drop in oil.
Commercial buying was supportive for values, while farmer selling remained light, which also helped elevate the market.
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However, the Canadian dollar was higher against its US counterpart, which made canola less attractive on the international market.
Improved prospects for development of the soybean crop in South America were also bearish and European rapeseed futures were slightly weaker which limited the gains.
Around 32,551 canola contracts were traded on Tuesday, which compares with Monday when around 33,272 contracts changed hands. Spreading accounted for 23,342 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade were up by three to six cents per bushel on Tuesday, with positioning ahead of Wednesday’s USDA supply/demand report a feature.
Average trade guesses are predicting a downward revision to the ending-stocks forecast from the government agency, due to solid export demand in the early stages of the crop year.
Advances in the product values, especially soymeal, helped pull soybeans higher as well, according to participants.
However, the large US supply situation and relatively favourable South American crop conditions did help temper the advances.
SOYOIL futures were up on Tuesday, but held range-bound overall as the market continues to consolidate near its recently hit contract lows.
SOYMEAL futures were up on Tuesday, leading the soy complex higher amid solid end-user demand.
CORN futures in Chicago were up by five to six cents per bushel on Tuesday, with positioning ahead of tomorrow’s USDA report a feature.
Ideas that China may lift some of its restrictions on US DDGS, a slightly firmer tone in crude oil, and the possibility of reduced US acres next spring were all supportive.
However, export demand has been lacklustre recently, and ideas that the USDA may raise its ending stocks forecast for the crop did limit the advances.
WHEAT futures in Chicago were down by nine to 12 cents per bushel on Tuesday, posting their first losses in four days.
News out of Russia that the country would not be slowing its wheat exports accounted for some of the selling pressure, according to participants.
General expectations that the USDA will raise its estimates for wheat ending stocks in tomorrow’s report added to the softer tone.
On the other side, weather concerns in a number of winter wheat growing regions of the world did remain somewhat supportive.
– Average trade guesses are calling for US wheat stocks, as of May 31, 2015, of 651 million bushels, which would be up by 6 million from the previous estimate.
– Winter wheat seedings in France are pegged at 5.083 million hectares by the country’s agriculture ministry. That’s up by 160,000 hectares from the previous year and marks the first time area to the crop has surpassed 5.0 million hectares in six years. So far, 93% of the crop was rated as good to excellent, which compares with only 80% at the same time a year ago.
– Kazakhstan’s 2014 grain harvest is currently forecast at 17 million tonnes, which would be up from earlier estimates but still below the 18.2 million tonnes harvested the previous year.
