By Phil Franz-Warkentin and Jade Markus, Commodity News Service
Winnipeg, Feb. 23 (CNS Canada) – ICE Futures Canada canola contracts were down sharply on Tuesday, dropping below nearby chart support in the process to hit fresh nine-month lows.
Losses in CBOT soyoil and soybeans contributed to the downturn in canola, with selling pressure in the Canadian market exaggerated as some stops were hit on the way down.
Declining crush margins were also bearish, although end-user bargain hunting at the lows did help limit the losses to some extent.
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A slightly weaker tone in the Canadian dollar also helped temper the declines, according to participants.
About 36,695 canola contracts were traded on Tuesday, which compares with Monday when 38,835 contracts changed hands. Spreading was a major feature, accounting for about 22,992 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed seven to eleven cents per bushel weaker on Tuesday, as attempts to push soybeans to the upside fizzled.
On Monday investor short-covering buoyed prices, but it triggered the ‘failure-to-launch’ losses seen on Tuesday.
Increased farmer selling in the US further pressured prices, as producers had been waiting for higher prices before marketing their soybeans, analysts say.
The ongoing Brazilian oilseed harvest added to the bearish tone on Tuesday.
SOYOIL prices settled weaker on Tuesday, tracking Malaysian palm oil.
SOYMEAL closed higher on Tuesday, following nearby grain and oilseed markets.
CORN futures closed four to five cents per bushel weaker on Tuesday, as investor short-covering flat-lined.
Increased farmer selling also pushed prices lower on Tuesday, as corn had recently moved to a two-week high.
A stronger US dollar added to the declines, as it makes US commodities less appealing to foreign buyers.
WHEAT closed four to eleven cents per bushel weaker on Tuesday, falling to fresh lows as the US government pegged this year’s wheat exports at a 44-year low.
US wheat has been struggling with a lack of competitiveness price-wise, due to strength in the country’s currency amid high global supplies.
Wheat prices haven’t touched these levels in more than five years.
– Due to poor growing conditions, Ukraine’s wheat harvest is expected to be down 17.3 million metric tonnes compared to 24.8 million metric tonnes last year, according to reports out of the country on Tuesday.
– China’s winter wheat seeding are expected to stay on par with last year’s level of about 561 million acres.
