By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Feb. 9 (CNS Canada) – ICE Futures Canada canola contracts were down on Tuesday, falling below major chart support as some sell stops were hit and speculative selling built on itself.
The March contract hit a session low of C$457 per tonne, which was well below previous support around C$463 per tonne and the weakest level for a front-month contract since September.
A firmer tone in the Canadian dollar contributed to the declines in canola, as the currency moved back above 72 US cents. The stronger currency cuts into crush margins and also makes exports less attractive to international buyers.
Read Also
North American Grain/Oilseed Review: Canola rises, down day for grains
Glacier FarmMedia | MarketsFarm – Canola futures on the Intercontinental Exchange were higher on Friday despite weakness in most comparable…
The USDA released a slew of supply/demand data on Tuesday, and a bearish reading as far as soybeans were concerned also put some spillover pressure on canola.
However, soybeans managed to settle with small gains and canola also finished off of its session lows, as oversold price sentiment and likely end user bargain hunting provided some support.
About 27,912 canola contracts were traded on Tuesday, which compares with Monday when 23,676 contracts changed hands. Spreading accounted for about 21,280 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed about one cent per bushel stronger on Tuesday, propped up by investor short-covering despite a bearish report.
On Tuesday the United States Department of Agriculture (USDA) released its world agricultural supply and demand estimates.
The USDA expects US soybean supplies to reach 450 million bushels, a 10 million bushel increase from January’s report, which is bearish.
SOYOIL prices settled mostly lower on Tuesday.
SOYMEAL closed weaker on Tuesday, following nearby grain and oilseed markets.
CORN futures closed one to two cents per bushel weaker on Tuesday, pressured by USDA data.
The USDA expects US corn stocks to hit 1.84 billion bushels, a 35 million bushel increase from previous forecasts.
The anticipated increase in stocks is due in part to reduced demand for the commodity, which is bearish.
WHEAT closed one to two cents per bushel weaker on Tuesday, weighed down by heavy supplies.
The USDA expects US wheat supplies to reach 966 million bushels, which is up from previous estimates.
The USDA also highlighted the lack of competitiveness of the country’s wheat, which is bearish.
World stocks further weighed on prices, as the USDA expects global supplies to hit 238.9 million tonnes.
– Canada’s overall wheat production in 2016/2017 is forecast to increase by three per cent from 2015/2016 production levels, according to a Canadian grain and feed update from the USDA’s Foreign Agricultural Service.
– European wheat futures fell to a contract low on Tuesday, market watchers say.
