Winnipeg, (MarketsFarm) – The ICE Futures canola market moved lower on Wednesday, hitting their lowest levels in over a month as bearish technical signals and heightened concerns over Chinese trade weighed on values.
China has now banned all imports of Canadian pork and beef, as the diplomatic dispute between the two countries shows no signs of resolving anytime soon.
Losses in Chicago soybeans and a firm tone in the Canadian dollar also put some pressure on canola.
Statistics Canada’s updated acreage estimates released
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Wednesday morning were within trade expectations for canola and did little to move the market. While canola area is expected to be down by 8.2 per cent on the year, at 20.95 million acres, large old crop supplies and the trade issues with China should still leave the country with burdensome carryout stocks.
About 24,272 canola contracts traded on Wednesday, which compares with Tuesday when 22,315 contracts changed hands. Spreading accounted for 15,606 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, with improving Midwestern forecasts behind some of the selling pressure.
Forecasts calling for warmer and drier weather over the next week should allow farmers to get in more soybean acres, with the weather also likely to benefit the already seeded crops.
The United States Department of Agriculture reported private export sales of 145,000 tonnes of soybeans to unknown destinations this morning.
The USDA will release acreage estimates on Friday, but traders are uncertain if this report will show the extent of the lost acres due to wet weather.
Optimism over U.S. and China trade relations provided some support, as the leaders of the two countries are set to meet at the G20 in Japan later this week.
CORN futures weakened, as the warmer and drier forecasts should help crop development.
Positioning ahead of Friday’s USDA reports was a feature. However, with some corn being planted for silage as a cover crop, instead of for grain, the acreage numbers may be skewed.
WHEAT futures were stronger, finding some support from Canada’s acreage estimates.
Total Canadian wheat area for 2019 was forecast at 24.6 million acres. That would be in line with last year’s level, but about a million acres below the previous estimate. While the headline number was supportive, most of the adjustment was tied to a reduction in durum acres, with non-durum spring wheat well above the year-ago level.
Hot and dry weather in Europe was also supportive for wheat.
OUTSIDE MARKETS
Light crude oil nearby futures in New York was up $1.38 at US$59.21 per barrel.
In the afternoon, the Canadian dollar was trading around US76.19 cents, up 28 cents from the previous trading day. The U.S. dollar was C$1.3125.
Markets numbers are unavailable today.
