North American Grain/Oilseed Review: Canola down sharply in broad selloff

By Phil Franz-Warkentin, MarketsFarm

WINNIPEG, Oct. 28 (MarketsFarm) – The ICE Futures canola market was down sharply on Wednesday, as losses in most outside financial and commodity markets weighed on prices.

Contracts briefly posted limit-down moves in overnight activity, with the January contract touching a session low of C$514 per tonne. Sell-stops triggered by fund activity were likely behind that sudden move.

The losses were more subdued by the close, although damage was done from a chart standpoint, according to trade participants.

Losses in equity markets and the Chicago Board of Trade soy complex contributed to the bearish tone in canola,

However, the Canadian dollar was also sharply weaker on the day, which provided some underlying support. Scale-down exporter and domestic crusher demand also helped temper the declines.

About 35,924 canola contracts traded on Wednesday, which compares with Tuesday when 26,302 contracts changed hands. Spreading accounted for 13,732 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Wednesday, with technical profit-taking a feature as a risk-off sentiment in the financial markets had speculators liquidating long positions.

Uncertainty ahead of the upcoming United States election, larger than expected U.S. crude oil stocks, and renewed pandemic concerns all contributed to the declines seen in many markets on Wednesday.

Improving moisture conditions in Brazil added to the softer tone in soybeans, with much needed rain in the South American country boosting the prospects for their next soybean crop.

Solid export demand did provide some underlying support. The U.S. Department of Agriculture announced private export sales of 110,000 tonnes of soybeans to Egypt this morning, with an additional 120,000 tonnes sold to unknown destinations.

CORN futures were also caught up in the general selling pressure on Wednesday, falling off their recently-hit 14-month highs.

South Korea bought 207,000 tonnes of optional origin corn overnight, which may or may not be filled by the U.S.

WHEAT futures were down in sympathy with most everything else, with improving moisture conditions across the U.S. Plains adding to the declines. Forecasts were calling for as much as four inches of rain in some areas of Kansas.

Dry areas of the Black Sea region were also seeing some much needed precipitation.

On the other side, concerns over snow and colder temperatures in the northern U.S. wheat growing areas provided some support, as the winter weather at this time of year could damage recently seeded winter wheat.

Futures Prices as of October 28, 2020

Canola
Price Change
Milling Wheat
1970-01-01 00:00
Price Change
Durum
1970-01-01 00:00
Price Change
New Barley
1970-01-01 00:00
Price Change

Prices are in Canadian dollars per metric ton

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