By Phil Franz-Warkentin and Jade Markus Commodity News Service
Winnipeg, August 24 – ICE Futures Canada canola contracts were weaker on Monday, but well off their session lows as oversold price sentiment and weakness in the Canadian dollar provided some support.
Sharp losses in Chinese equities provided the catalyst for a wave of selling seen in many financial markets on Monday. Speculators were noted sellers in canola, liquidating long positions and creating new shorts, according to participants.
Losses in CBOT soyoil and other vegetable oil markets contributed to the declines in canola.
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However, after losing nearly twenty dollars at one point during the day, the November canola contract was only down by C$2.50 per tonne at the close.
The Canadian dollar was down by about a third of a cent relative to its US counterpart, which provided some support, according to traders.
Heavy rains in parts of Manitoba over the weekend, together with reports of freezing temperatures in Alberta and Saskatchewan, were also supportive, with the size of this year’s crop still up in the air.
About 19,353 canola contracts were traded on Monday, which compares with Friday when 23,610 contracts changed hands.
Milling wheat, durum, and barley were all untraded.
SOYBEAN futures at the Chicago Board of Trade closed 12 to 17 cents per bushel weaker on Monday after falling to a six and a half year low earlier in the day.
On Monday Chinese stocks fell nine per cent, dragging down other markets and currencies. Concerns over China’s economy could mean the country will import less soybeans, which is significant as the country is a major buyer of oilseeds.
Analysts say a weekly USDA crop report to be released later on Monday is expected to show improved soybean crop ratings, which added to the bearish tone.
SOYOIL prices settled weaker on Monday outpacing soybeans to the downside.
SOYMEAL closed mixed on Monday.
CORN futures closed one to three cents per bushel stronger
Monday as a lower US dollar had a bullish effect on prices.
A weaker greenback makes US exports more affordable for foreign buyers.
Corn futures were also supported by data released on Friday from the 2015 Pro Farmer Midwest Crop Tour.
The tour estimated US production would be near 13.323 billion bushels, which is lower than the USDA’s projections.
WHEAT futures in Chicago closed three to five cents per bushel higher Monday, also supported by a lower US dollar.
Wheat prices have been struggling due to a lack of global demand, and market watchers say a lower greenback could help prices be more competitive globally.
Market watchers say winter wheat harvest in Northern areas is done to near-done.
– Analysts say spring wheat harvest is about 80 to 85 per cent done.
– Statistics Canada says though Canadian wheat crop is estimated to be down 15.9 per cent from last year, quality should be good.
