By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, July 25 (CNS Canada) – ICE Futures canola contracts settled with small losses on Wednesday, after trading to both sides of unchanged in choppy activity. While gains in the Chicago soy complex provided some spillover support, canola was pressured by a firmer tone in the Canadian dollar.
Relatively favourable Canadian growing conditions, despite some areas of concern, also weighed on values, according to participants.
A lack of significant end user demand was also noted, with expectations for large carryout supplies and the looming new crop harvest keeping buyers on the sidelines.
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About 9,537 canola contracts traded, which compares with Tuesday when 12,015 contracts changed hands. Spreading accounted for 2,772 of the contracts traded.
WHEAT futures in the United States were sharply stronger on Wednesday, posting gains of about 30 cents per bushel and pulling the other grains and oilseeds up as well.
Declining production estimates out of Europe provided the catalyst for the rally in wheat, as France’s Strategie Grains cut their estimate for Europe’s soft wheat production by 2.4 million tonnes, to around 130 million. French milling wheat futures hit new contract highs in overnight activity.
A tour of U.S. spring wheat growing regions was also supportive, as early yield estimates were coming in a bit below average. However, the yields were reportedly showing some improvement on Wednesday.
Ideas that the rally was looking overdone to the upside also tempered the gains in wheat.
SOYBEANS posted small gains, finding some spillover support from the rally in wheat.
Traders were trying to get a better handle on the ramifications of the proposed US$12 billion aid package and ongoing trade dispute with China.
Weather conditions across the Midwest remain relatively favourable for crop development, tempering the upside.
CORN futures were also pulled higher by wheat, rising six by six cents per bushel in the September contract.
Solid demand from the ethanol sector contributed to the gains, with the latest data showing the largest weekly U.S. production in seven months.
Canadian corn exports to Europe are reportedly up considerably on the year, as Canadian corn displaces some U.S. corn that now faces a 25 per cent tariff.
