North American grain/oilseed review: Canola hits one-month lows

By Phil Franz-Warkentin

Glacier FarmMedia MarketsFarm – The ICE Futures canola market fell to its weakest levels of the past month on Tuesday, seeing follow-through selling after Monday’s sharp drop.

Large old crop supplies and favourable conditions for new crop development contributed to the declines, with end-users content to watch prices trend lower.

Losses in the Chicago soy complex also weighed on canola, with European rapeseed and Malaysian palm oil also down on the day.

A weaker tone in the Canadian dollar provided underlying support, as did ideas the losses were starting to look overdone.

There were an estimated 68,027 contracts traded on Tuesday, which compares with Monday when 67,240 contracts traded. Spreading accounted for 30,358 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade had shown early strength Tuesday on ideas the market was due for a correction after recent losses. However, values turned lower as the day progressed, with losses in crude oil behind some of the spillover selling pressure.

Soybean planting in the United States was 78 per cent complete as of this past Sunday, according to the weekly crop report. That was slightly behind trade expectations but ahead of the 73 per cent average for this time of year.

Emergence was three points ahead of average, at 55 per cent.

Monthly crush data released Monday showed 177.7 million bushels of soybeans were crushed in the U.S. in April, which was above average trade estimates but about five percent below the year ago level.

CORN held narrowly rangebound, lacking any clear direction.

The first condition ratings of the growing season for U.S. corn pegged the crop at 75 per cent good-to-excellent, beating average trade expectations for a 70 per cent reading.

Only nine per cent of intended corn acres remain to be seeded, with emergence at 74 per cent.

An estimated 416.9 million bushels of corn was used for ethanol production in the U.S. in April, falling short of trade expectations closer to 433 million.

WHEAT drifted lower on Tuesday, despite ongoing concerns over Russian wheat production as forecasts call for heat and dryness in the country.

The U.S. spring wheat crop was 94 per cent seeded in the weekly report, four points ahead of average, with just over three quarters of the crop emerged. About 74 per cent of the crop was rated good-to-excellent, which was nine points ahead of average for this time of year.

Winter wheat condition ratings in the country came in at 49 per cent good-to-excellent. The harvest was getting started at six per cent done, roughly double the average for the beginning of June.