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North American Grains/Oilseed Review: Canola ends mixed as cash basis improves

By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Apr. 12 – The ICE Futures Canada canola market finished mixed in technical trading on Wednesday. The nearby May contract was taking support from ideas that canola stocks are falling while the July contract was pressured by action in the Canadian currency and losses in Malaysian palm oil.

Gains in the US soy complex propped up the May and more deferred contracts.

Improvements in the cash basis throughout Western Canada were supportive, according to an analyst in Winnipeg.

Slow farmer selling added to the upside.

However, the Canadian dollar was higher relative to its US counterpart, which made canola less attractive to international buyers.

Oilseed acreage is expected to be large in both the US and Canada this spring.

The rise in South American soybean production estimates undermined prices.

Around 31,403 canola contracts were traded on Wednesday, which
compares with Tuesday when around 38,701 contracts changed hands. Spreading accounted for about 26,654 of the contracts traded.

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 were up by five to eight cents per bushel on Wednesday, as fund buying came forward to take prices off of the one year lows hit the previous session.

Tuesday’s USDA supply/demand report predicted record large world soybean ending stocks and raised South American production estimates. However, the bearish supply situation may already be factored into the futures, which had investors back on the buy side, according to participants.

End-user bargain hunting was another supportive influence.

SOYOIL futures were up on Wednesday, seeing a modest recovery following recent losses.

SOYMEAL futures were stronger on Wednesday, following soybeans.

CORN futures in Chicago were up by one to two cents per bushel on Wednesday, as concerns over seeding delays in parts of the Midwest provided support.

Forecasts remain wet across much of the Corn Belt through to the end of April, which will delay spring planting and could see some intended corn acres shift into soybeans instead. Soybeans are typically seeded later than corn.

WHEAT futures in Chicago were steady to slightly lower on Wednesday, while Minneapolis and Kansas City contracts edged higher.

A downward revision to France’s wheat stocks by FranceAgriMer provided some support for wheat. However, world supplies remain more than sufficient to meet demand overall.

Relatively favourable weather conditions across the US winter wheat growing belt also put some pressure on wheat values.

Commodity Future Prices

Canola
2017-04-12 13:19
Price Change
May495.000.50
Jul494.00-0.80
Nov479.400.20
Jan482.400.80
Milling Wheat
2017-04-12 13:53
Price Change
May227.00p1.00
Jul228.00p1.00
Oct224.00p1.00
Dec228.00p1.00
Durum
2017-04-12 13:53
Price Change
May272.00p0.00
Jul271.00p0.00
Oct263.00p0.00
Dec263.00p0.00
New Barley
2017-04-12 13:53
Price Change
May137.00p0.00
Jul138.00p0.00
Oct140.00p0.00
Dec140.00p0.00

Prices are in Canadian dollars per metric ton

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