North American grain/oilseed review: Canola ends weak on low note

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market was weaker on Friday, taking back much of Thursday’s gains with chart-based speculative selling ahead of the weekend a feature.

Losses in the Chicago soy complex accounted for some spillover weakness in the Canadian oilseed. European rapeseed futures were also lower, although Malaysian palm oil posted small gains overnight.

Large old crop supplies and relatively favourable Prairie weather conditions contributed to the bearish tone in canola, with end users showing little interest in bidding up the market.

However, weakness in the Canadian dollar provided some underlying support.

There were an estimated 51,519 contracts traded on Friday, which compares with Thursday when 88,262 contracts traded. Spreading accounted for 29,062 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Friday, taking back Thursday’s gains as relatively favourable Midwestern crop weather and pre-weekend positioning weighed on prices.

A planned strike by port workers in Argentina was cut short yesterday, with exports continuing to flow as normal.

The United States Department of Agriculture announced private export sales of 104,000 tonnes of soybeans to China, providing some support to the futures.

Chinese customs data showed the country imported a total of 10.2 million tonnes of soybeans in May, with calendar year-to-date imports of 37.4 million tonnes down by about five per cent on the year.

Tighter rules on industry tax credits in Brazil announced yesterday provided some support, as the adjustments could reduce Brazil’s competitiveness on the global market while opening the door for more North American sales of grains and oilseeds.

CORN was also pressured by the good U.S. growing conditions and pre-weekend profit taking.

Positioning ahead of next week’s monthly USDA supply demand report accounted for some of the activity as well.

WHEAT futures were down across the board. Turkey announced it would halt wheat imports from June 21 until at least the middle of October to protect domestic producers. The move weighed heavily on wheat markets, as it takes a buyer out of the market and will leave Russia and other exporters looking to offload cheaper wheat elsewhere.

Russia officially declared a state of emergency in 10 regions, due to the frosts that damaged crops in May. However, officials maintain that exports will continue despite the smaller wheat crop.