By Dave Sims and Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, September 1 – THE ICE Futures Canada canola market ended lower, following losses in US soy amid a sea of financial volatility.
Steep losses in the Chinese stock market once again dragged down financial markets while crude oil also finished weaker, which weighed on commodity markets everywhere.
The long-term technical trend lies to the downside, according to a trader.
European rapeseed futures were also lower and seasonal harvest pressure also contributed to the declines.
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However, the Canadian dollar was lower relative to its US counterpart which made canola more attractive on the international market.
Malaysian palm oil was higher which helped give some strength to canola.
Some recent wet weather in parts of the Prairies also kept a weather premium in the market.
Investors are also waiting to see Statistic Canada’s ending stocks report which is due out Thursday.
Around 20,272 canola contracts were traded on Tuesday, which compares with Monday when around 19,985 contracts changed hands.
SOYBEAN futures at the Chicago Board of Trade were down by 12 to 13 cents per bushel on Tuesday, as renewed economic concerns out of China provided the catalyst for some fresh speculative selling.
Soft Chinese manufacturing data released Tuesday was seen as a sign that the country’s economy is slowing down, which may also cut into the demand for commodities.
The resulting losses in crude oil and strength in the US dollar contributed to the declines in soybeans.
Relatively favourable Midwestern crop conditions were also bearish for beans, with the weekly USDA crop ratings holding steady at 63% good-to-excellent. Traders had been anticipating a slight downgrade on the week.
Chart support did hold to the downside, and profit-taking at the lows provided some support.
SOYOIL settled lower on Tuesday, as sharp losses in crude oil weighed on the market.
SOYMEAL futures were down on Tuesday.
CORN futures in Chicago were down by five to eight cents per bushel on Tuesday, as the grain was also pressured by the broad selling seen in most financial markets.
A slight decline in the weekly good-to-excellent ratings did provide some support, although 68% of the crop still falls within that category.
WHEAT futures in Chicago were steady to up a penny on Tuesday, despite the losses elsewhere as speculative short-covering helped take the market off of its nearby lows. Minneapolis and Kansas City futures, meanwhile, were down by as much as five cents per bushel.
Wheat had dropped to fresh four-month lows on Monday, and was looking oversold from a chart standpoint, according to participants.
However, the fact that US wheat remains expensive internationally did limit the upside potential.
– Russian export tariffs have tempered sales from the country in recent months, but officials there have also expressed plans to increase sales to Egypt.
– The US spring wheat harvest was 88% complete as of this past Sunday, which compares with the five-year average of 62% done.
