By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 30 (MarketsFarm) – The ICE Futures canola market was down sharply on Tuesday, hitting contract lows in many months as speculative chart-based selling built on itself.
Losses in crude oil spilled over to weigh on most vegetable oil markets, with declines in Chicago soyoil, European rapeseed and Malaysian palm oil futures adding to the bearish tone in canola.
Seeding operations are nearing completion across Western Canada, with forecasts calling for timely rains across most of Prairies over the next week.
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Scale-down end user demand provided some support amid tightening old crop supplies and the need to ration some demand.
About 36,640 canola contracts traded on Tuesday, which compares with Friday when 10,387 contracts changed hands. Spreading accounted for 17,960 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were sharply lower on Tuesday, with the selling pressure building on itself as some stops were hit along the way and activity resumed following the Memorial Day holiday. Crude oil was down by nearly five per cent, which weighed heavily on the grains and oilseeds.
Large Brazilian soybean crops displacing soybeans from the United States in the global export market added the selling pressure.
Soybean seeding across the U.S. is nearing completion, although the hot and dry conditions that helped speed planting could be a supportive influence in the long run.
CORN was also caught up in the broad ‘risk-off’ sentiment weighing on markets, but lagged soybeans to the downside.
Large production estimates out of Brazil, where the harvest of the second crop is just getting started, contributed to the declines in corn.
WHEAT was down across the board, with a move below US$6.00 per bushel in the July Chicago contract marking the first time the front month contract had traded that low in more than two years.
The Minneapolis and Kansas City futures were still off their own lows, with concerns over the state of the hard red winter wheat crop and seeding delays for spring wheat providing some support for those markets.
While the ongoing conflict between Russia and Ukraine remained a feature in the background of the wheat trade, large supplies of cheap Russian wheat was weighing on prices.
Big wheat crops elsewhere in the world, including India and Europe, were also bearish.
