By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, July 8 (MarketsFarm) – The ICE Futures canola market was weaker on Wednesday, backing away from three-month highs after running into chart resistance.
Losses in the Chicago Board of Trade soy complex and a firmer tone in the Canadian dollar contributed to the selling pressure in canola. The currency was up by roughly half-a-cent relative to its United States counterpart, hitting 74 U.S. cents.
However, persistent weather concerns in parts of Western Canada provided some underlying support, as excessive moisture raises disease concerns and cuts into the production prospects in some areas.
About 17,004 canola contracts traded on Wednesday, which compares with Tuesday when 14,237 contracts changed hands. Spreading accounted for 5,134 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, with easing weather concerns behind some of the selling pressure.
Updated weather forecasts calling for improving moisture conditions across the Midwest over the next week were behind some of the selling pressure, as hot and dry conditions had boosted values recently.
The United States Department of Agriculture releases its monthly supply/demand report on Friday, and pre-report positioning was a feature. Traders generally anticipate a downward revision to U.S. corn production from earlier estimates and an increase in soybeans. Adjustments to the ending stocks forecasts will also be followed closely.
Talk of Chinese demand was circulating the market, helping temper the declines. However, no fresh business was confirmed today.
CORN futures traded to both sides of unchanged, but managed to move higher in sympathy with wheat.
However, the improving Midwestern weather forecasts did put some pressure on values.
WHEAT futures posted double digit gains in many months, with chart-based buying exaggerating the move.
Yield reports are coming in below expectations in some cases as the U.S. winter wheat harvest moves forward, accounting for some of the strength.
Declining production estimates out of Europe and the Black Sea region, as the harvest gets underway there, were also supportive.
