By Phil Franz-Warkentin and Jade Markus, Commodity News Service Canada
Winnipeg, Jan. 11 – ICE Futures Canada canola contracts were down on Monday, as losses in many outside vegetable oil markets – including CBOT soyoil and Malaysian palm oil – spilled over to weigh on prices.
Economic concerns out of China were at the forefront of the global markets once again on Monday, which contributed to the selling pressure in canola as China is a major customer.
Positioning ahead of a number of key reports set to be released by the USDA on Tuesday contributed to the softer tone in canola, with many analysts bracing for a bearish reading of the data.
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However, a lack of significant farmer selling did temper the declines in canola as exporters and domestic crushers continue to show solid demand.
Weakness in the Canadian dollar also provided some underlying support for canola, according to participants.
About 10,123 canola contracts were traded on Monday, which compares with Friday when 16,798 contracts changed hands. Spreading accounted for about 2,442 of the contracts traded.
Milling wheat, durum, and barley futures were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed one-and-a-half cents per bushel higher to four-and-a-half cents per bushel lower Monday, pressured by declines in Chinese stocks, and positioning ahead of data from the United States Department of Agriculture (USDA).
Chinese stock markets fell Monday, which injected turbulence into many commodity markets.
The reports the USDA will be releasing include grain stocks, and world agricultural production.
Rain in Brazil added to the bearish tone, as it improves the outlook for the country’s crops.
Strength was only found in the nearby January contract as traders took profits as the contract moved off the boards.
SOYOIL prices settled lower on Monday, pressured by a stronger US dollar, and general commodity weakness. Analysts say the commodity is moving in a narrow range short-term.
SOYMEAL closed higher on Monday.
CORN futures closed four to five cents per bushel lower on Monday, pressured by losses in crude oil futures, and positioning ahead of USDA data.
Weaker crude oil prices reduce the likelihood that corn will be processed into ethanol.
Weakness in the nearby wheat market was also bearish for corn.
WHEAT closed about nine cents per bushel weaker on Monday, as ample stocks are expected to be reflected in Tuesday’s USDA data.
A stronger US dollar also pressured prices on Monday, especially as rival exporters are strong competition for US commodities.
Spill over turbulence from China’s stock market added to the declines.
– Singapore-based commodity trader Olam International has bought the wheat milling and pasta making assets of Nigeria’s BUA Group.
– Canada’s Western Winter Wheat Initiative (WWWI) is getting a C$1 million boost from the Mosaic Company Foundation. The funds will be received over the next three years.
