By Glen Hallick, MarketsFarm
WINNIPEG, April 23 (MarketsFarm) – ICE Futures canola contracts fell on Tuesday, hitting new contract lows for a third consecutive day amid heavy trading.
Canola bids followed U.S. soybeans on a downward slide. Even a weaker loonie wasn’t able to support canola prices on Tuesday.
The May and July contracts dropped C$5.30 each, with May closing at C$438.10 per tonne. July finished at C$446.50 per tonne.
One trader indicated the canola market needs something such as a major weather event to help prices go back up, or even dropping lower to force the spec funds to give up their control of the market.
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Another trader said a trade deal between the United States and China, which is to be a boon for soybeans with spillover into canola, “isn’t going to matter when it happens.” There could be a small rally, but soybean prices would still fall after the deal is signed, he stated.
Canola might get some help Wednesday morning, when Statistics Canada releases its planting acres report. It’s widely expected canola acres will be down from last year’s 22.8 million acres. Estimates range from 19.4 million to 22.5 million acres to be planted.
Canada’s wheat acres are expected to increase by up to one million acres. Estimates range from 25 million to 25.9 million acres to be planted.
Projections are calling for more acres of barley, flax, oats and corn planted in Canada this year.
There were 40,677 contracts traded on Tuesday, which compares with Monday when 32,640 contracts changed hands.
SOYBEAN futures at the Chicago Board of Trade (CBOT) plummeted on Tuesday.
With United States/China trade talks off the radar and the U.S. burdened with large old crop stocks, soybeans took a beating today. Prices for May and July were down by about 15 cents per bushel, closing at about US$8.62 and US$8.75 per bushel respectively.
The impact of African swine fever has reduced China’s demand for soybeans to 85 million tonnes this year. Ample global stocks have been compounding falling prices even further.
There is the strong likelihood that U.S. farmers will switch from corn to planting soybeans, due to wet conditions this spring.
So far, about one per cent of soybeans are in the ground according to the U.S. Department of Agriculture (USDA). That’s about half of what is usually planted by mid-April.
CORN futures were weaker on Tuesday, caught in a spillover from soybeans. The May contract at CBOT lost nearly four cents, closing short of US$3.55 per bushel.
About six per cent of the U.S. corn has been planted so far, according to the USDA.
U.S. corn could be facing something of a dilemma. While the USDA projected China needing to import about five million tonnes of corn, none of that is expected be acquired from the U.S.
WHEAT futures were stronger on Tuesday, correcting somewhat from yesterday’s losses. Gains ranged from two to three cents per bushel.
Approximately four per cent of spring wheat has been planted and that is well short of the five-year average of 22 per cent planted by mid-April.
The U.S. winter wheat crop rated 62 per cent good to excellent, according to the USDA. Of the remainder, 30 per cent was fair and eight per cent was poor.
SovEcon reported Russia’s wheat exports are slightly down so far in the 2018/19 crop year, at 34.89 million tonnes.
Meanwhile European Union soft wheat exports decreased by two per cent year-over-year to 16.49 million tonnes.
