By Phil Franz-Warkentin
Glacier FarmMedia MarketsFarm – The ICE Futures canola market was weaker on Tuesday, taking back most of Monday’s gains as bearish technical signals and losses in outside markets weighed on values.
Losses in crude oil accounted for spillover selling pressure in most world oilseed and vegetable oil markets on Tuesday, with the Chicago soy complex, European rapeseed and Malaysian palm oil all lower.
Chart-based speculative selling contributed to the declines, as canola remained well below most major moving averages.
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ICE canola dropping at midday Wednesday
Glacier FarmMedia — The ICE Futures canola market was weaker at midday Wednesday, falling to its lowest levels of the…
However, scale-down end user demand provided some support as crush margins remain very wide.
There were an estimated 48,425 contracts traded on Tuesday, which compares with Monday when 47,513 contracts traded. Spreading accounted for 28,988 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday. Sharp losses in crude oil following the latest inflation data out of the United States accounted for some of the spillover selling pressure in soybeans, amid ideas the U.S. Federal Reserve could still raise rates to keep inflation under control.
Chart-based positioning after Monday’s gains also weighed on soybeans, although ongoing uncertainty over South American production prospects provided some support.
Heat and dryness remained a concern in parts of Brazil, with private forecasters generally lowering their calls on the size of the country’s next soybean crop.
The U.S. Department of Agriculture reported private export sales of 198,000 of US soybeans to unknown destinations this morning, providing some support.
CORN futures were stronger, taking some direction from wheat.
Optimism that sustainable aviation fuel made from corn-based ethanol will be able to qualify for renewable fuel tax credits in the U.S. underpinned the corn market, with direction from the country’s Treasury Department expected sometime this week.
The uncertain production prospects in Brazil were also supportive for corn, although conditions in Argentina look relatively favourable for the time being.
WHEAT was higher across the board, taking back all of yesterday’s losses.
Rising wheat prices in Russia were said to be behind some of the strength in the U.S. Expectations for good export demand were also supportive, although no fresh sales were announced on Tuesday.
France’s agriculture ministry reported that winter wheat seedings were down by five per cent on the year.
