By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, January 7 – The ICE Futures Canada canola market dropped sharply Thursday on speculator selling, a trader said. Investors began bailing out of positions after the front-month contract fell below a key support point amid a sea of bearish global economic news.
Around 11:10 central time the March contract broke below the key C$480 per tonne mark. This triggered a flurry of sales that pushed heavily on values.
Losses in crude oil, Malaysian palm oil, CBOT soyoil and European rapeseed futures also helped to undermine canola prices.
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Favorable weather in South America also helped raise development prospects for that crop, which was bearish.
Turmoil across global financial markets also weighed down canola.
However, relative firmness in US soybeans helped to limit the losses.
The Canadian dollar is near its lowest level in over a decade which had sparked foreign interest in buying canola.
Investors are keenly waiting for the release of the USDA quarterly stocks report on January 12.
Around 29,329 canola contracts were traded on Thursday, which compares with Wednesday when around 22,490 contracts changed hands. Spreading accounted for about 11,908 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric ton.
SOYBEAN futures at the Chicago Board of Trade settled within one cent of unchanged on Thursday after chopping around within a narrow range throughout the session.
The ongoing economic concerns out of China initially weighed on soybeans, as investors were bailing out of commodities along with the equity markets. However, soybeans found some support to the downside and short-covering came forward to underpin the market.
Weekly US soybean export sales came in at 638,700 tonnes, which was at the high end of trade guesses. However, the sales were still the second lowest of the marketing year to date.
SOYOIL settled lower on Thursday, as losses in crude oil and the global equity markets weighed on values. Soft weekly US export sales contributed to the bearish tone in soyoil.
SOYMEAL futures were lower on Thursday.
CORN futures in Chicago settled within a half cent of unchanged on Thursday, as the market continued to consolidate within a narrow range ahead of the January 12 USDA supply/demand and stocks reports.
Weekly US corn exports came in well below average trade guesses, at only 252,900 tonnes, according to the USDA data. That was the second worst showing of the current marketing year.
WHEAT futures in Chicago were up by four to six cents per bushel on Thursday, as modest speculative short-covering helped lift values off of nearby lows.
Weather concerns in some wheat growing regions of the world were also supportive, although the fundamentals remain bearish overall.
Weekly US wheat exports hit their lowest level for the 2015/16 marketing year, with only 76,500 tonnes sold during the past week, limiting the upside.
– Egypt’s state grain buyer GASC is cracking down on ergot contamination, and now says it will enforce a zero tolerance policy on wheat contaminated with the fungus.
