By Dave Sims and Jade Markus, Commodity News Service Canada
Winnipeg, July 19 – THE ICE Futures Canada canola market suffered losses on Tuesday due to weakness in the US soy complex.
Crude oil was weaker on the day which was bearish for canola.
The overall chart picture does not look especially promising for canola, said a trader in Winnipeg.
“From a technical standpoint it’s looking like we’re going to go down and test those recent lows from early July,” he said. The low mark during that period was when the most-active contract hit C$461 per tonne.
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However, the Canadian dollar was roughly half a cent weaker compared to its US counterpart, which made canola more enticing to foreign buyers.
A looming blast of heat in the US Midwest is not expected to be as severe as initially thought, which underpinned prices.
Gains in Malaysian palm oil and European rapeseed futures were bullish for canola.
Milling wheat, barley and durum were untraded.
About 16,855 canola contracts traded on Tuesday, which compares with Monday when 19,545 contracts changed hands.
Spreading accounted for about 2,246 of the contracts traded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade closed 19 to 38 cents per bushel weaker on Tuesday, pressured by steady crop ratings from the United States Department of Agriculture.
The USDA left crop conditions unchanged, pegging 71 per cent of soybeans in good to excellent condition.
Forecasts for rain in Iowa and Illinois, two major soybean producers, added to the bearish tone on Tuesday.
Industry groups say China’s imports of soybeans could drop for the first time in 15 years, as the country sells off its reserves and increases domestic production, which further pressured prices.
SOYOIL prices closed weaker on Tuesday.
SOYMEAL closed lower on Tuesday.
CORN futures were 10 to 15 cents per bushel weaker on Tuesday, pressured by a stronger US dollar and losses in crude oil.
Gains in the greenback were bearish for corn, as it makes the country’s commodities less affordable for international buyers.
Weaker crude oil futures added to the declines, as corn is used in ethanol production.
Weaker ethanol prices reduce the likelihood that processors will blend more than mandated amounts.
Steady US crop ratings caused further losses for corn.
WHEAT closed 11 to 12 cents per bushel lower on Tuesday, gathering spillover weakness from the nearby corn and soybean markets.
A strengthening US dollar, amid the country’s advancing winter wheat harvest was also bearish.
Reports say the US winter wheat harvest is about 76 per cent finished.
– Japan has put out a tender for close to 165 tonnes of wheat, market watchers say.
– About 69 per cent of spring wheat is in good to excellent condition in main US wheat growing areas, the USDA said in a report for the week ending July 17.
