By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, Dec. 8 (MarketsFarm) – The ICE Futures canola market was weaker on Tuesday, with losses in the Chicago Board of Trade soy complex providing the catalyst for the selloff in the Canadian oilseed.
Fund long liquidation was a feature, as the canola market backed away from its recent highs and investors booked profits.
Ongoing strength in the Canadian dollar also weighed on
values, as the currency hovered above 78 United States cents.
However, the underlying fundamentals remained supportive, with smaller production and a record export pace meaning that the market will need to work to ration demand going forward.
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About 56,184 canola contracts traded on Tuesday, which compares with Monday when 39,672 contracts changed hands. Spreading accounted for 42,070 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, with improving South American weather conditions and strength in the United States Dollar Index behind some of the selling pressure.
Forecasts calling for more rain in dry areas of Brazil and Argentina over the next week to 10 days accounted for much of the declines, as traders took out some of the weather premium that had built up in the market over dryness concerns in South America.
While more moisture will be needed, the precipitation was seen as enough to boost the yield prospects for the time being.
CORN futures were also pressured lower by the improving South American moisture conditions.
The U.S. Department of Agriculture releases its monthly supply/demand report later this week, and pre-report positioning is expected to account for some activity the next few days.
Trade estimates are calling for downward revisions to both the corn and soybean ending stocks projections.
WHEAT futures were lower, taking some direction from soybeans and corn.
Ample world wheat supplies contributed to the softer tone in wheat, with general expectations calling for an upward revision to world wheat stocks in this week’s USDA report.
