By Dave Sims, Commodity News Service Canada
Winnipeg, August 1 – The ICE Futures Canada canola market suffered sharp losses on Tuesday, in sympathy with the US soy complex which plummeted in the wake of a USDA crop condition report. The agency found the soybean crop had actually improved in quality, which weighed down the oilseed market throughout North America.
Steep losses in vegetable oil were also bearish for canola.
Weather conditions in Western Canada and the US Plains have turned milder, which undermined prices.
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Steady soybean exports from South America also dragged down values.
However, the summer heat has damaged canola crops in southern Saskatchewan and southern Alberta, which helped prop up prices.
The Canadian dollar was lower, relative to its US counterpart, which made canola more enticing to foreign buyers.
About 13,593 canola contracts traded on Tuesday, which compares with Monday when 8,389 contracts changed hands. Spreading accounted for 1,642 of the contracts traded.
Milling wheat, durum, and barley were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
Soybeans were 30 to 35 cents lower, pushed down by the USDA’s crop condition report. The agency pegged the US soybean crop at 59 percent good to excellent, which was two percent higher than what most analysts had expected.
The soybean market was already under pressure from improving weather conditions in the US Midwest.
US Bio-fuel production numbers in May were slightly higher than expected.
Corn was around six to eight cents weaker on the day. The market was weighed down by showers in the US Corn Belt along with forecasts calling for wet and cool weather in Iowa.
China is preparing to auction off 3.5 million tonnes of corn later this week.
The USDA attache for China pegged that country’s corn production in 2017/18 at 210 million tonnes, down from the previous estimate of 219 million tonnes.
Wheat was nine to 13 cents weaker with the September contract in Chicago at 4.64 cents per bushel.
Better weather forecasts in the US Plains continued to weigh on the market.
China sold 8,900 tonnes of wheat from its state reserves.
