ICE Canada Review: Canola Lower On Ideas It’s Overbought
By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, May 24 – THE ICE Futures Canada canola market finished lower on Tuesday, taking direction from the weaker US
soy complex and on ideas the market was overbought.
Rain fell over the past few days on parts of Alberta which partially alleviated concerns over excess dryness.
“We’ve gone from probably 50 percent of the Prairies looking dry to about 25 percent looking dry,” said a Winnipeg-based
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US farmers continue to switch out corn acres in favour of US soybeans which was bearish for canola.
There are ideas canola is somewhat expensive relative to other oilseeds.
However, many farmers are still busy seeding which curbed producer selling and was supportive.
Crude oil was stronger which limited the losses.
The Canadian dollar was slightly lower relative to its US counterpart, which made canola more attractive to outside buyers.
Around 19,468 canola contracts were traded on Tuesday, which compares with Friday when around 23,427 contracts changed hands.
The Canadian market was closed on Monday for Victoria Day.
Spreading accounted for about 6,534 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 down by three to eight cents per bushel on Tuesday, after bouncing around both sides of unchanged in choppy activity.
Solid export demand, including a 140,000 tonne sale of US soybeans to ‘unknown destinations’ provided some early support. Production concerns in Argentina helped underpin the futures as well, according to participants.
However, the good US seeding pace and ideas that some intended corn acres will go into soybeans instead weighed on values. The US soybean crop was 56 per cent seeded as of this past Sunday, which compares with the five-year average of 52 per cent.
SOYOIL futures were down on Tuesday,
SOYMEAL futures were narrowly mixed on Tuesday.
CORN futures in Chicago were narrowly mixed on Tuesday, holding near unchanged in the most active months as traders were trying to get a better handle on acreage ideas.
The US corn crop was 86 per cent seeded as of this past Sunday, which was slightly ahead of the five-year average but behind trade guesses. However, forecasts calling for heavy rains over the next week may delay the final stages of seeding, causing some corn acres to be switched to soybeans.
WHEAT futures in Chicago were up by one to two cents per bushel on Tuesday, after a choppy session.
Excess moisture in the Southern Plains accounted for some of the buying interest in wheat.
The US winter wheat crop was rated 62 per cent good-to-excellent in the latest weekly USDA report, which was unchanged from the previous week. Spring wheat was 95 per cent seeded in the country, with 76 per cent hitting the good-to-excellent category.
– Argentina is importing wheat for the first time ever, purchasing 300 tonnes from neighbouring Uruguay, according to reports. The small business is possibly a test, with larger shipments possible in the future, according to analysts.
– Russia has exported 23.3 million tonnes of wheat during the 2015/16 crop year to date, which began July 1, according to government data. The exports are running 15.6 per cent ahead of the previous year’s pace.
