North American Grains/Oilseed Review: Canola plummets below major support
By Dave Sims, Commodity News Service Canada
Winnipeg, Mar 23 – The ICE Futures Canada canola market suffered steep losses on Thursday, amid a barrage of bearish chart signals and technical selling.
Large soybean supplies from South America were pressuring the
canola market in early trading. Once the market broke below the psychologically-important C$500 mark the selling built on itself.
“We kept thinking something would happen to move the market up like last year but we didn’t have the increase in US soybean acreage like we do this year,” said a Winnipeg-based trader.
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Technical selling was also a feature as traders unwound the July/November spread, said the trader.
Losses in the US soy complex and Malaysian palm oil dragged on prices.
However, global demand for oilseeds remains robust, which was supportive for the market.
Tightness in Canadian canola stocks helped prop up values.
Around 34,633 canola contracts were traded on Thursday, which
compares with Wednesday when around 28,480 contracts changed hands. Spreading accounted for about 24,864 of the contracts traded.
Milling wheat, barley and durum were all untraded.
Settlement prices are in Canadian dollars per metric tonne.
SOYBEAN futures at the Chicago Board of Trade fell six to eight cents on Thursday.
The market was undermined by ideas that large funds will continue to liquidate positions in the absence of any major bullish news.
The US National Biodiesel Board has reportedly filed a complaint with the US government that Argentina and Indonesia are illegally dumping subsidized bio-diesel into the market.
On the other side, weekly soybean exports were pegged at 738,000 tonnes, which was well ahead of traders’ estimates of just 350,000 to 500,000 tonnes.
SOYOIL futures dropped 30 to 31 points on Thursday.
SOYMEAL futures ticked lower on the day.
CORN futures in Chicago fell two cents per bushel on Thursday in narrow, chart-based trade.
According to reports out of the country, the latest estimate of Brazil’s corn crop was 91.5 million tonnes, which is up 36.5 percent from last year’s crop. There are ideas that number could rise further to 98 million.
Strength in the US dollar and declines in crude oil were bearish for corn.
The market continues to trade sideways as participants wait for the USDA’s Prospective Plantings Report on March 31.
WHEAT futures in Chicago dropped one to two cents per bushel on Thursday in technical trade.
The market was pushed slightly lower due to favourable weather in the US Plains.
Weekly US wheat exports were on the high end of expectations at 419,000 tonnes.
China imported 234,000 tonnes of wheat in February, which was up 116.5 per cent on the year.
