By Phil Franz-Warkentin, MarketsFarm
WINNIPEG, May 21 (MarketsFarm) – The ICE Futures canola market fell to its lowest levels in two weeks on Thursday as losses in the Chicago soy complex triggered a round of speculative selling.
Increasing trade tensions between the United States and China accounted for some of the weakness soybeans.
Speculators taking profits on recently acquired long positions added to the declines in canola, as the market showed signs of running into resistance from a technical standpoint.
Seeding conditions were variable across the Prairies. The weather remains relatively favourable in most of Manitoba and Saskatchewan, while precipitation in Alberta was causing delays.
Saskatchewan released its weekly crop report, pegging seeding progress at 51 per cent complete. That was behind last year’s pace, but in line with the five-year average.
About 11,884 canola contracts traded on Thursday, which compares with Wednesday when 9,250 contracts changed hands. Spreading accounted for 4,430 of the contracts traded.
SOYBEAN futures at the Chicago Board of Trade were lower on Thursday amid renewed concerns over Chinese demand.
The United States Department of Agriculture reported weekly soybean export sales of 1.2 million tonnes of old crop business and an additional 464,000 tonnes to move in the new crop year. While China was a major buyer in the weekly data, the lack of any flash sales in recent days was taken as a bearish sign by traders.
Weekly soyoil sales of 62,000 tonnes beat expectations, while soymeal sales of just under 200,000 tonnes were in line with trade guesses.
Good Midwestern seeding weather also weighed on values.
CORN futures lower on the day, taking some direction from the selloff in soybeans.
Weekly U.S. corn exports of about 880,000 tonnes for movement during the current marketing year were in line with expectations, but the USDA also reported net cancellations of 29,000 tonnes of new crop business.
Poor demand from the ethanol sector continued to weigh on values, despite optimism that easing social-distancing restrictions would lead to increased usage of the renewable fuel.
WHEAT futures were mixed, with losses in Minneapolis spring wheat and gains in the winter wheats.
Weekly U.S. wheat exports of about 425,000 tonnes of old and new crop business combined were in line with expectations.
Mixed results were coming out of a crop tour underway in Kansas this week, with average yields in the major wheat growing state ranging anywhere from 33 to 42.5 bushels per acre, depending on the region.
In other wheat news, forecasters in Russia lowered their production estimate for the country by a million tonnes, to 76.2 million tonnes.