By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Feb. 8 (CNS Canada) – ICE Futures Canada canola contracts were down on Monday, retesting major chart support in the process as speculative selling weighed on values.
Losses in CBOT soyoil, ample supplies in Western Canada, steady farmer selling, and a lack of aggressive end user demand all contributed to the declines in canola, according to participants.
Speculators were said to be noted sellers, as the technical signals remained bearish overall.
However, March canola managed to settle off its lows for the day, finishing right above the psychological C$465 per tonne level. A softer tone in the Canadian dollar provided some underlying support as well.
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About 23,676 canola contracts were traded on Monday, which compares with Friday when 38,876 contracts changed hands. Spreading accounted for about 17,728 of the contracts traded. Adjustments to the old/new crop spread were a feature, as the old crop July 2016 contract and new crop November 2016 contract have moved from an inverse to a carry position over the past week.
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 five to six cents per bushel weaker on Monday, as weekend rains in Argentina gave a boost to the country’s thirsty crops.
Argentina’s well-timed rains reduce the likelihood that the country will see crop loss, market watchers say.
Brazilian harvest pressure was also a source of losses on Monday.
Turbulence in outside equity markets and crude oil futures added to the bearish tone, according to analysts.
SOYOIL prices settled lower on Monday, tracking Malaysian palm oil.
SOYMEAL closed weaker on Monday, following nearby grain and oilseed markets.
CORN futures closed about four cents per bushel lower on Monday, pressured by a stronger US dollar.
Favourable weather in South America, a competing growing region, was also bearish.
Positioning ahead of a bundle of key reports from the United States Department of Agriculture was a feature on Monday.
WHEAT closed seven to eight cents per bushel weaker on Monday, pressured by a stronger US dollar, and weak export demand.
Market watchers say US wheat prices are higher than others, which is bearish.
However, the expectation that Egypt’s ergot situation has been resolved limited losses on Monday.
– Cold weather in the US could impact crops in some regions, analysts say.
– Egypt’s wheat purchases are only seven per cent past last year’s pace, according to market watchers.
