The Good: The funds liquidated their short position in the week ending on Jan 27 which was positive news for the soybean oil market. This consequently will support the canola market over the longer term. Managed money funds bought back a total of 38,604 contracts during the week. This pushed the net position of the managed money funds to a net long of 13,335 contracts which is the equivalent of 362,919 tonnes. The long position is the first time since the end of October that funds have been bullish soybean oil. Soybean oil futures have dropped since this report was released soybean oil futures have dropped to 53.2 U.S. cents per pound. This is off by 1.2 cents per pound from the peak set last week.
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The Good, Bad & Ugly
The Good: Wheat markets had a good day with nearby spring wheat July futures jumping by 13 cents per bushel to…
The Bad: The canola market dropped by C$3.00 per tonne today with nearby futures closing at C$645 per tonne. The drop in canola followed the general selloff in commodities today that pressured all oilseed markets today. Soybean futures closed the day down by four cents per bushel today. The bad news is that canola is trading at the bottom end of the recent trading range. Canola needs to stabilize in the coming sessions in order to prevent a drop below the critical C$640 per tonne trading level.
The Ugly: The wheat markets were under pressure today as the general sell off in commodity markets pushed all three wheat futures markets lower. The spring wheat market closed down by seven cents per bushel in today’s trade and settled at US$5.72 per bushel. The losses in spring wheat paled in comparison to winter wheat futures which were down by nine to ten cents per bushel in both Chicago and Kansas City markets. The drop pushed the spring wheat contract below the 50 day moving average, but it did mange to close above the 20 day moving average. The ugly news is that spring wheat futures are likely to test the 20 day moving average in the coming sessions. Things could get ugly for spring wheat (and the winter wheat markets) in the coming weeks.
