By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Jan. 28 (CNS Canada) – ICE Futures canola contracts were weaker on Monday, taking some direction from Chicago Board of Trade soybeans.
Soft export demand contributed to the declines, as canola exports fall farther behind the year-ago pace. Concerns over slowing Chinese demand, amid Canada’s ongoing diplomatic dispute with the major canola customer, also weighed on values.
However, weakness in the Canadian dollar provided some underlying support.
CBOT soyoil futures held onto small gains, and the combination of the softer currency and rising vegetable oil values helped crush margins improve.
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About 18,651 canola contracts traded on Monday, which compares with Friday when 22,094 contracts changed hands. Spreading accounted for 6,252 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Monday, as the market saw a profit-taking correction after hitting two-week highs on Friday.
Weekly United States soybean export inspections of about 930,000 tonnes were down from both the previous week and year ago levels.
China and the U.S. are set to hold some more trade talks this week, and any developments on that front will likely provide some direction for the futures.
The reopening of the U.S. government, and resulting return of reporting from the U.S. Department of Agriculture, could also provide some much needed data for traders. A monthly report is scheduled to be released next week Friday, Feb. 8. However, the agency could also release some data earlier that was missed over the past month.
Weather concerns in parts of South America provided some support. However, production is still expected to large overall out of the continent, with the new crop harvest already underway in Brazil.
CORN futures were lower, taking some direction from soybeans and wheat.
South American weather uncertainty kept some caution in the corn market, with traders also waiting on the resumption of USDA reporting.
WHEAT futures were all lower, with speculative positioning a feature to start the week.
Forecasts calling for cold temperatures in some key Midwestern winter wheat growing regions over the next week were somewhat supportive. However, overnight gains ran into resistance and profit-taking came forward to weigh on prices.
Russia lowered its wheat export forecast for the current marketing year by one million tonnes. While the reduction was slightly supportive, the 36 million tonne projection is still large overall.
