By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Feb. 25 (CNS Canada) – ICE Futures Canada canola contracts were down sharply on Thursday, falling to their lowest levels in more than nine months.
Canola was “very volatile; very weak,” according to a trader who described the selling pressure as heavy when it materialized.
Strength in the Canadian dollar, which gained nearly a full cent relative to its US counterpart, likely provided the catalyst for the declines in canola. Losses in CBOT soybeans and soyoil were also bearish, while lingering concerns over tightening Chinese import standards were also in the background.
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However, canola did manage to settle well off its lows for the day, with commercial bargain hunting at the lows providing some support, according to participants.
Ideas that canola was looking oversold from a chart standpoint also helped temper the declines.
About 43,012 canola contracts were traded on Thursday, which compares with Wednesday when 30,457 contracts changed hands. Spreading accounted for about 27,644 of the contracts traded.
Milling wheat and durum were both untraded, but barley saw some activity on Thursday. About 225 barley contracts were traded, with participants exiting the nearby March contract a feature.
SOYBEAN futures at the Chicago Board of Trade were down by five to eight cents per bushel on Thursday, as disappointing weekly export sales weighed on prices.
The US only sold 328,300 tonnes of beans during the past week, according to the latest USDA data. That was at the low end of trade guesses, and well off the levels seen in recent weeks.
Relatively favourable South American crop conditions remained a bearish influence as well.
USDA officials announced their first acreage projections of the year at their annual outlook forum Thursday morning. US soybean area is forecast at 82.5 million acres, which would be down by 0.2 per cent from 2015.
SOYOIL settled lower on Thursday, with poor weekly export sales behind some of the selling pressure. US exporters only sold 3,200 tonnes of soyoil during the week, which was the second lowest of the marketing year to date.
SOYMEAL futures were lower on Thursday, following soybeans.
CORN futures in Chicago were down by three to four cents per bushel on Thursday.
Weekly US corn export sales came in at just under a million tonnes, which was off the levels posted the previous week.
Corn was also pressured by the USDA acreage outlook, which called for US corn plantings to increase by 2.3 per cent in 2016, to 90 million acres.
WHEAT futures in Chicago were up by one to three cents per bushel on Thursday, seeing a modest recovery off of the multi-year lows hit earlier in the week. Kansas City wheat futures posted similar gains, while the Minneapolis spring wheat market held closer to unchanged.
Weekly US wheat exports, at nearly 400,000 tonnes, were the best in three months and helped account for some of the buying interest.
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