The ICE Futures canola market was sharply lower on Tuesday, breaking below nearby chart support.
Bearish technical signals contributed to the declines, with some stops likely hit on the way down as speculators added to their large net short positions. A lack of significant end user demand on the other side added to the weaker tone, as large old crop carryout supplies and no major concerns over new crop production kept buyers only interested on a scale-down basis.
The Chicago soy complex was also sharply lower, accounting for some spillover selling in canola. European rapeseed and Malaysian palm oil futures were weaker as well.
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Statistics Canada releases updated acreage estimates on Thursday, with average trade guesses only calling for minor revisions to seeded canola area from the 21.4 million acres forecast in March.
There were an estimated 43,877 contracts traded on Tuesday, which compares with Monday when 34,660 contracts traded. Spreading accounted for 21,206 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, taking back all of Monday’s gains and hitting fresh contract lows in some months as speculative selling built on itself and the old/new crop spread widened.
Condition ratings for the United States soybean crop dipped three points on the week, now at 67 per cent good to excellent – with emergence of 90 per cent up slightly from the 87 per cent average for this time of year.
Traders were still trying to get a handle on the extent of the damage caused to soybean crops by recent flooding in parts of the Midwest, with some areas still looking too wet after the rains and others in need of more moisture.
Positioning ahead of Friday’s U.S. Department of Agriculture acreage report was a feature, with expectations for a slight increase in soybean area compared to the March report. Quarterly stocks data will also be out Friday.
CORN was also caught up in the broad speculative selloff, with forecasts calling for rain in some dry regions of the eastern corn belt weighing on values.
U.S. corn condition ratings came in at 69 per cent good to excellent, which was down three points from the previous week and in line with trade expectations. Emergence at 97 per cent was one point ahead of average.
The USDA reported flash sales of 210,000 tonnes of corn to Mexico this morning, with the majority to move in the new crop year.
WHEAT futures continued their downward slide, after an overnight attempt at moving higher ran into resistance.
The U.S. winter wheat harvest was 50 per cent complete as of this past Sunday, well ahead of the 25 per cent average for this time of year.
The winter wheat still on the field was rated 52 per cent good to excellent, up three points on the week.
Spring wheat in the country came in at 71 per cent good to excellent, which was down five points from the previous week – but still well above the 58 per cent average for this time of year.
