By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Nov. 19 (CNS Canada) – ICE Futures canola contracts were lower on Monday, finishing right above major chart support as the market reacted to the heavy losses seen in Chicago Board of Trade soybeans.
Renewed concerns over the state of trade relations between the United States and China sparked the selloff in soybeans that spilled into canola, according to participants.
Speculators were reportedly noted sellers in the canola market, adding to their large net short positions.
On the other side, end-users were only buying on a scale-down basis, as the overall trend remains pointed lower,
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However, a lack of significant farmer selling provided some underlying support, according to a broker. Oversold price sentiment and a weaker tone in the Canadian dollar also helped temper the declines.
About 11,424 canola contracts traded, which compares with Friday when 12,704 contracts changed hands. Spreading accounted for 6,232 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade fell sharply lower on Monday, as traders reacted to comments made by United States Vice President Mike Pence at the at the Asia-Pacific Economic Cooperation (APEC) trade summit in Papua New Guinea over the weekend.
Pence’s stance at the APEC summit took some of the optimism out of the soybean market that had built up ahead of the G20 meeting next week. With China and the U.S. still very much at odds over trade, market participants are unsure if U.S. President Donald Trump will be able to follow through on his own recent comments claiming a deal was close.
Reports of more African swine fever cases in China were also bearish for beans, as reductions to the Chinese hog herd would cut into world feed demand whether or not the U.S. is the one selling the beans to China.
Adverse Midwestern weather causing delays for the soybean fields still standing provided some support. Although with less than 10 per cent of the harvest remaining, the support was minimal.
CORN futures were lower, taking some direction from soybeans and wheat.
The Chinese trade uncertainty was also bearish for corn, while news that China has started an anti-dumping investigation into Australian barley also weighed on feed grains in general.
The USDA announced a flash sale of 138,000 tonnes of corn to South Korea this morning, and the solid demand provided some support.
WHEAT futures were mixed, with losses in Chicago and Kansas City winter wheat contracts and a firmer tone in Minneapolis spring wheat.
Weekly U.S. wheat export shipments of about 500,000 tonnes were solid, but the export pace is still running behind where it should be to meet the U.S. Department of Agriculture’s targets.
