The Good: Managed money funds sold a net of 14,713 contracts during the week ending on July 8. The funds position now stands at 123,506 contracts net long for canola. This remains the longest net canola position held by the funds for this week on record. The drop in the futures market raised concerns that the funds were liquidating their record long position. The good news is that the funds have been selling canola futures at a very modest rate. Concerns about the dryness in western Canada continues to support canola futures. This is keeping the funds from more aggressively selling their position in canola.
The Bad: The canola futures seem to have stabilized in the past two trading sessions with the nearby contract losing 10 cents per tonne. The bad news is that canola futures settled at C$682.60 per tonne despite trading as high as C$691 per tonne during the session. Canola futures closed down despite strength in the soybean oil market. Soybean oil futures closed the day up by 0.65 to 0.77 per cent which should have supported canola markets. That was bad news for canola markets.
The Ugly: Spring wheat futures dropped by 10 cents per bushel with the September contract settling the day at US$6.04 per bushel. The spring wheat contracts led wheat markets lower today with winter wheat futures down by one to four cents per bushel on the day. Spring wheat futures have lost over 25 cents per bushel in the past two trading sessions. The ugly news is that spring wheat futures are destined to test the contract lows that were set in mid-May.
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