By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, June 16 (CNS Canada) – ICE Futures Canada canola contracts were down sharply on Thursday, as a sell-off in the Chicago Board of Trade soy complex spilled over to weigh on prices.
Oversold price sentiment had fund traders liquidating long positions, while the recent strength in the market also triggered increased farmer hedges, according to participants.
Relatively favourable growing conditions across most of North America were also bearish, although traders said there were also still more than enough areas of concern to keep some weather premiums in the market.
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Scale down commercial demand and the weaker Canadian dollar were also supportive.
About 35,993 canola contracts were traded on Thursday, which compares with Wednesday when 25,451 contracts changed hands. Spreading accounted for 15,571 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded, although prices were revised after the close.
SOYBEAN futures at the Chicago Board of Trade closed 16 to 21 cents per bushel lower on Thursday, pressured by profit-taking after an extended rally.
Analysts say some commodity funds have left long positions, which added to the declines.
Spillover weakness from the soy oil and soymeal markets furthered losses.
However, stronger export sales reported by the United States Department of Agriculture (USDA) capped declines.
Soybean sales in the week ended June 9 were up eight per cent from the previous week and 57 per cent from the prior four-week average, the USDA said in a report on Thursday.
SOYOIL prices closed lower on Thursday, tracking overnight losses in Malaysian palm oil.
SOYMEAL closed weaker on Thursday.
CORN futures were one to four cents per bushel lower on Thursday, feeling spillover weakness from the nearby soybean market.
Gains in the US dollar also had a bearish influence on Thursday, as a stronger greenback makes the country’s commodities less appealing to international buyers.
Lower export sales reported by the USDA added to corn’s declines.
Corn sales in the week ended June 9 were down 39 per cent from the previous week and 36 per cent from the prior four-week average, the USDA said.
WHEAT closed five to seven cents per bushel lower on Thursday as favourable crop-conditions pressured the market.
Gains in the US dollar added to the declines.
Traders say the market is vulnerable to short-covering due to fund positions.
– Wheat sales in the week ended June 9 totaled 762,900 metric tonnes for delivery in marketing year 2016/2017, the USDA said.
– Argentinian farmers are expected to plant more wheat going forward as the country has eliminated its export tax, market watchers say.
