By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, April 11 – THE ICE Futures Canada canola market finished narrowly mixed on Monday, as gains in Chicago soybeans were offset by action in the Canadian dollar.
Values were consolidating at the upper end of their recently established range, but the front-month contract was unable to hold above C$480 per tonne.
The Canadian dollar was over half a cent higher than its US counterpart, which made canola less desirable to foreign buyers.
The global soybean supply is becoming quite large, which undermined the market.
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“They’re facing a horrendous supply of soybeans,” said a Winnipeg-based analyst. “That will eventually come back to weigh on the market once we get past the usual spring activity.”
Vegetable oil was generally weaker which was bearish.
However, Chicago soybeans and crude oil were both stronger which limited the losses.
Concerns over dry sections of Western Canada also propped up values.
Around 23,486 canola contracts traded on Monday, which compares with Friday when around 21,524 contracts changed hands. Spreading accounted for about 15,092 of the contracts traded.
Milling wheat, barley and durum were untraded and unchanged.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade were up nine to 12 cents per bushel on Monday, hitting fresh seven-month highs as a move above nearby resistance triggered some speculative buy-stops.
Solid weekly export inspections contributed to the firmer tone in soybeans, according to participants. Concerns that untimely rains would cause harvest delays in Argentina were also somewhat supportive.
However, losses in soyoil did put some pressure on values.
Monthly Malaysian palm oil production data released today beat expectations, with 1.2 million tonnes produced, putting some pressure on world vegetable oil markets. However, both production and stocks of palm oil were down on the year.
The USDA releases its latest monthly supply/demand report on Tuesday, and positioning ahead of the data was a feature in the US markets.
SOYOIL futures were down slightly on Monday, with spreading against soymeal behind some of the activity.
SOYMEAL futures were up on Monday.
CORN futures in Chicago were down by five to six cents per bushel on Monday, as losses in the neighbouring wheat market spilled over to weigh on prices.
Forecasts calling for some better seeding weather in the US added to the softer tone.
However, solid export demand did provide some underlying support – with the USDA reporting weekly corn export inspections of over 1.1 million tonnes.
Gains in crude oil were supportive for corn, given the grain’s connection to ethanol production.
WHEAT futures in Chicago were down nine to 13 cents per bushel on Monday, amid improving crop prospects.
Welcome rainfall was seen across many US winter wheat growing regions over the weekend, which should help aid in crop development.
Weekly US wheat export inspections, at 339,000 tonnes, were in line with market expectations.
– Japan’s Ministry of Agriculture bought 137,486 tonnes of wheat from the US, Canada, and Australia in a tender over the weekend.
– South Africa increased its import duty on wheat by 34% on Friday. The move is expected to raise the domestic price of bread by 10%, according to local reports.
