North American Grain/Oilseed Review: Canola ends down in choppy trade

By Phil Franz-Warkentin, Commodity News Service Canada

Winnipeg, Jan. 29 (CNS Canada) – ICE Futures canola contracts were weaker on Tuesday, although activity was thin and choppy as participants await some fresh direction.

Losses in Chicago soybeans and soyoil accounted for some of the spillover selling pressure in canola, with bearish technical signals and poor export demand adding to the softer tone.

The Canadian dollar held steady on Tuesday, providing little direction for the market.

Extremely cold temperatures in parts of Western Canada were likely limiting farmer deliveries, providing some underlying support.

About 14,517 canola contracts traded on Tuesday, which compares with Monday when 18,651 contracts changed hands. Spreading accounted for 8,128 of the contracts traded.

SOYBEAN futures at the Chicago Board of Trade were weaker on Tuesday, with participants showing some caution ahead of trade talks between China and the United States set to start on Wednesday.

While there was some optimism over improving relations earlier in January, that sentiment has faded as the U.S. moves forward with criminal charges against Chinese technology company Huawei.

Improving weather forecasts out of Brazil were also bearish for beans, with the harvest pressure mounting out of the country. However, hot and dry conditions have still cut into the production prospects overall.

The reopening of the U.S. government has traders awaiting a number of key supply/demand reports, due out Feb. 8. Weekly export sales figures should also be released for the first time in over a month on Thursday.

CORN was lower, taking some direction from soybeans and wheat. Weakness in ethanol added to the softer tone, according to participants.

However, solid export demand provided some support. The U.S. Department of Agriculture reported private sales of 138,000 tonnes to South Korea this morning.

Declining production estimates out of Brazil were also somewhat supportive.

WHEAT futures were lower, as the U.S. missed out on the latest Egyptian wheat tender. While the U.S. reportedly had the lowest offer, freight rates kept the country out of the running with the business going to France and Romania.

Bitterly cold temperatures in parts of the Midwest provided some support, amid concerns over winterkill.

Ideas that Russian wheat is starting to price itself out of the export market were also supportive.

Futures Prices as of January 29, 2019

Canola
2019-01-29 13:19
Price Change
Mar 484.50 -2.00
May 492.80 -2.20
Jul 500.40 -1.90
Nov 497.70 -1.90
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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