WINNIPEG – The ICE Futures canola market was weaker on Tuesday, dropping below psychological support as speculative selling weighed on values.
The nearby March contract fell below C$800 per tonne, which was bearish from a chart standpoint. Concerns that Australia’s large canola crop will cut into some Canadian export demand added to the softer tone, according to participants.
Losses in Chicago soyoil also weighed on values, although soybeans held closer to unchanged and European rapeseed was higher on the day. The Malaysian palm oil market was untraded due to the Lunar New Year holiday.
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Domestic crush margins remain strong and scale-down end user demand provided some support.
About 34,963 canola contracts traded on Tuesday, which compares with Monday when 27,510 contracts changed hands. Spreading accounted for 25,806 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were slightly lower at the closing bell on Tuesday, after posting gains earlier in the day.
Speculative positioning accounted for some early buying interest, but beans backed away from their session highs after filling a gap in the charts. Losses in soyoil contributed to the eventual downturn.
Weekend rains easing dryness concerns in Argentina remained a bearish influence, but more moisture will still be needed through the growing season.
CORN was said to be due for a short-covering correction after yesterday’s losses, with some fresh export demand contributing to Tuesday’s gains.
The United States Department of Agriculture announced private export sales of 130,000 tonnes of corn to unknown destinations this morning.
However, the recent rains in Argentina kept a lid on the upside.
WHEAT was higher across the board, posting double-digit gains in all three markets.
A crop report out of Texas showed winter wheat conditions in the state at only 11 per cent good-to-excellent, which was down 10 points from November with 43 per cent of the crop poor-to-very-poor as freeze damage was noted in some areas. The conditions were still slightly better than last year’s rating at the same time of nine per cent good-to-excellent.
Dry areas of the southern U.S. Plains saw some much-needed precipitation recently, putting some pressure on values. However, forecasts calling for cold temperatures over the next few weeks were supportive.
