By Phil Franz-Warkentin and Erin DeBooy, Commodity News Service Canada
Winnipeg, Aug. 2 (CNS Canada) – ICE Futures Canada canola contracts were down on Tuesday, finishing just above major support as chart-based selling weighed on values.
Losses in soybeans at the Chicago Board of Trade, put spillover pressure on canola, although soyoil managed to move higher. The weakness in the US was tied to improving crop conditions and relatively favourable weather forecasts across the Midwest.
Fund activity contributed to the declines, with fund traders adding to their large net short position of about 48,000 contracts in canola, according to a broker. A lack of significant end user demand on the other side was also bearish, as crush margins deteriorated and buyers anticipate the large new crop supplies that will soon be available.
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Canadian crop conditions look good overall, although hail and heavy rains in some areas over the weekend were seen as potentially supportive for prices.
Declining rapeseed production estimates out of Europe were also somewhat supportive, with Strategie Grains pegging the EU crop at 20.7 million tonnes. That would be down by over half a million tonnes from an earlier estimate.
About 19,240 canola contracts were traded on Tuesday, which compares with Friday when 12,654 contracts changed hands. Canadian markets were closed Monday for a civic holiday.
Milling wheat and durum were untraded, while barley held steady in light commercial activity.
SOYBEAN futures at the Chicago Board of Trade fell on Tuesday with favourable weather.
Prices fell 8 to 10 cents on Tuesday, with the September contract settling at US$9.7125 per bushel.
The Midwest is expecting to see favourable weather in the next week, paving the way for larger soybean crops.
On Monday, the USDA raised its weekly soybean crop condition ratings, also weighing on prices.
SOYOIL prices closed higher on Tuesday with spreading against soymeal behind some of the strength.
SOYMEAL closed weaker on Tuesday.
CORN futures fell between 1 to 2 cents on Friday, as the USDA left corn crop condition ratings unchanged.
Some analysts expected a decline in crop ratings, due to last week’s hot temperatures. However, corn remains in great condition, weighing on prices.
Favourable weather is expected in the Midwest over the next few days, bolstering expectations of large crops.
WHEAT closed lower on Tuesday, with daily lows dipping below US$4 per bushel for the first time in a decade.
Dropping just under 5 cents, the September contract settled at US$4.0125 per bushel.
With the exception of France, global wheat crops have taken a bearish tone, as US harvest exceeds expectations and Ukraine and Russia are on course to produce record crops.
Wheat crops in France suffered greatly from flood damage and are expected to be at least 30 per cent smaller than 2015’s, slightly limiting losses.
-With a wet growing season across the Canadian Prairies, ergot has started being detected across the provinces, according to reports. So far, ergot has been detected in grass hay and fall rye, and is expected to spread to spring wheat soon.
-Due to a good harvest, Iran will stop importing wheat and will be exporting its surplus, according to the State Trading Corporation of Iran. More than 9 million tonnes of wheat have been bought from local farmers in Iran so far, so surplus will be exported until the end of the current Iranian year, March 2017.
