By Phil Franz-Warkentin and Dave Sims, Commodity News Service
Winnipeg, August 11 – ICE Futures Canada canola contracts were weaker on Tuesday, taking some direction from a downturn in the CBOT soy complex.
A move by China to devalue its currency weighed on the US grains and oilseeds across the board, which spilled over to weigh on canola, according to a broker.
Light speculative profit taking after Monday’s advances was also behind some of the weakness, according to participants. The recent strength in the market was also bringing in some farmer selling, as producers were said to be busy cleaning out bin space ahead of the harvest.
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On the other side, the Canadian dollar was sharply weaker, which kept a bid underneath the market, according to traders. The softer currency makes exports more attractive and also boosts crush margins. The need to keep some weather premiums in the market, as conditions turn hot and dry across the Prairies, was also supportive.
About 15,273 canola contracts were traded on Tuesday, which compares with Monday when 15,354 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
SOYBEAN prices tumbled 21 to 27 cents per bushel Tuesday, as China’s decision to devalue its currency stoked fears over the Asian giant’s appetite for commodities, including agricultural stocks.
Analysts said the move would raise the cost of imports for Chinese buyers and could damage demand for US soybeans.
Prices were also pressured by the USDA’s weekly crop report which indicated 63 percent of the US crop was good or excellent as of Sunday.
SOYOIL futures in Chicago ended 33 points lower.
SOYMEAL futures also suffered losses as the demand for US soymeal from Chinese livestock operators is expected to decline.
CORN futures on the Chicago Board of Trade corrected 13 cents per bushel lower Tuesday after hitting their highest mark in two weeks during the previous session.
The USDA rates 70 percent of the corn crop as either good or excellent, which is about the same as last week. Analysts had expected those numbers to go down.
The winter wheat harvest is starting to wind down, according to a report.
Wheat futures on the Chicago Board of Trade ended 17 to 18 cents per bushel lower Tuesday, in part due to selling by hedge funds as well as spillover losses in corn and soybeans.
Tomorrow’s USDA Supply and Demand Estimates survey is expected to cause volatility in the market. Analysts say values could see-saw depending on what the report says.
The advancing US spring wheat harvest also put values under pressure, according to a report.
– Russia from July 1 to August 5 this year has exported 2.293 million tons of grain, which is 39.8 percent lower than a year earlier.
– Iran bought the most wheat from Russia in the month of July, surpassing both Turkey and Egypt.
Settlement prices are in Canadian dollars per metric tonne.
